Item 04 2024-00730 Renewal of Sacramento Tourism Marketing District No. 2024-01 - Protest Hearing Results

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00730 4/2/2024 Consent Item 4.

Renewal of Sacramento Tourism Marketing District No. 2024-01 - Protest Hearing Results File ID: 2024-00730
Location: Citywide
Recommendation: 1) Receive a report on the tabulation of written protests submitted and not withdrawn before the public hearing closed on March 26, 2024; 2) adopt a Resolution renewing the Sacramento Tourism Marketing District (STMD) No. 2024-01 for a ten-year term, confirming and levying an assessment, and approving the STMD budget and assessment for Fiscal Year (FY) 2024/25; 3) adopt an Ordinance to renew the STMD; and 4) adopt a Resolution of Intention to Modify the STMD’s existing Management District Plan to terminate it early.

Contact: Susanne Tam, Development Project Manager [email protected], (916) 808-7535; Sheri Smith, Special Districts Manager, [email protected] (916) 808-7204, Department of Finance
Presenter: None.

Attachments:
1-Description Analysis
2-Schedule of Proceedings
3-Resolution of Renewal
4-Exhibit A, MDP
5-Ordinance to Renew STMD
6-Resolution of Intention to Modify Existing MDP
7-Exhibit A, Modified MDP
Description/Analysis
Issue Detail: Visit Sacramento and Sacramento area lodging businesses have proposed to renew the STMD for a new ten-year term. The STMD was formed by business owners to fund marketing and sales services for assessed lodging businesses with the intent to increase tourism and to market Sacramento for lodging businesses as a tourist, meeting, and event destination. The STMD was initially formed in 2012 for a five-year term and then subsequently renewed in 2017 for a ten-year term and is set to expire in 2027.

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File ID: 2024-00730 4/2/2024 Consent Item 4.

The Sacramento lodging businesses have petitioned the City to renew the district early for a new ten- year term to adjust the assessment rates and district boundaries. If approved, the renewed district will deliver marketing and promotional services to each specific zone within the STMD. The proposed assessment, services, and a map of the STMD area and zones for the renewal term are further detailed in the Management District Plan (MDP) attached to this staff report and on file with the Infrastructure Finance Division of the Finance Department, designated by the City Clerk to be the repository for documents related to business improvement districts.

On February 6, 2024, Council approved the Resolution of Intention No. 2024-0027 to renew the STMD and set March 12, 2024, and March 26, 2024, as the dates for the public meeting and public hearing respectively for the proposed renewal of the STMD. A Joint Notice of Public Meeting and Public Hearing was mailed to all affected businesses on February 8, 2024.

On March 12, 2024, Council held the required public meeting as a venue for public testimony and for affected business owners in the STMD to discuss the renewal proceedings. No formal action was taken by Council subsequent to the conclusion of the public meeting.

On March 26, 2024, Council held the required public hearing on the renewal of the STMD. At the conclusion of the public hearing, the City Clerk tabulated the written protests submitted and not withdrawn to determine whether there was a majority protest against the proposed renewal of the STMD (i.e., whether a majority of the lodging business owners who submitted written protests are opposed to the STMD and assessment). Based on the City Clerk’s tabulation of the compliant protests, there was not a majority protest. As such, staff recommends that the Council adopt a resolution renewing the STMD for a ten-year term that will run from July 1, 2024, through June 30, 2034, and levying the STMD assessment. The original ending date of the current STMD was June 30, 2027. Therefore, staff also recommends that Council pass a motion to modify the existing MDP, terminating it early on June 30, 2024.

In addition, staff recommends a motion to pass an uncodified ordinance (Attachment 5) to renew the STMD because, if passed, the Taxpayer Protection and Government Accountability Act (which is on the ballot for this November) requires an ordinance for adoption of all such assessments dating back to 2022.

Policy Considerations: The renewal proceedings described in this report are in accordance with the Property and Business Improvement District Law of 1994 (California Streets and Highways Code Section 36600 et seq.).

Economic Impacts: None.

Environmental Considerations: The renewal of a business improvement district does not constitute a project under the California Environmental Quality Act and is therefore exempt from review

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File ID: 2024-00730 4/2/2024 Consent Item 4.
pursuant to Guidelines Section 15378(b)(4).

Sustainability: Not applicable.

Commission/Committee Action: On March 26, 2024, Council voted to bypass the Law and Legislative Committee for review of the STMD renewal ordinance. The renewal ordinance is uncodified and is being brought forward because of the proposed Taxpayer Protection and Government Accountability Act, which is on the ballot for November 2024.

Rationale for Recommendation: Renewal of the STMD will create additional funds to be utilized for marketing and sales promotions specifically targeted to business each zone within the STMD. The specific zones for the STMD are identified in the MDP.

Financial Considerations: The STMD is self-supporting and has no impact on the General Fund.

Financing for the STMD will be provided by the levy of an annual assessment upon lodging businesses that benefit from marketing and sales promotions. The STMD is divided into four zones, based on the special benefits received in each zone. Lodging businesses will be assessed based on a percentage of gross short-term room rental revenue for stays no longer than 30 days, varied by benefit zone. The initial annual assessment proposed for each zone is as follows: Zone 1: 3.45%, Zone 2: 2.875%, Zone 3: 2.30%, and Zone 4: 1.15%.

The STMD will not issue bonds. The total STMD assessment budget in the first year of the renewal period is estimated to be $9.5 million (as detailed in the MDP). The City of Sacramento will retain 2% of the amount of assessment collected from lodging businesses within the STMD to cover the costs of collection and administration. The operating budget for the STMD, which will fluctuate with market conditions and room night sales, will be adjusted annually to reflect Council approved assessments and expenditure plans. An annual report will be presented to Council pursuant to Streets and Highways Code Section 36650.

Local Business Enterprise (LBE): Not applicable.

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SCHEDULE OF PROCEEDINGS
SACRAMENTO TOURISM MANAGEMENT DISTRICT NO. 2024-01

December 20, 2023 Petition Drive Kick-off

February 2, 2024 Receive Signed Petitions

February 6, 2024 City Council
• Resolution of Intention to Renew
• Resolution Requesting County Consent

February 8, 2024 Mailed Notices of Public Meeting and Public Hearing

March 12, 2024 City Council – Public Meeting on Renewal of STMD

March 12, 2024 County Board of Supervisors – Resolution Approving Renewal

March 26, 2024 City Council
• Public Hearing on Renewal of STMD
• Pass for Publication Ordinance Renewing STMD

April 2, 2024 City Council
• Protest Hearing Results for Renewal
• Adopt Resolution of Renewal
• Adopt Ordinance Renewing the STMD
• Adopt Resolution of Intent to Modify Existing
STMD (Terminating It Early)

May 7, 2024 Public Hearing to Adopt Resolution of Modification Terminating Existing STMD Early

July 1, 2024 Renewed STMD Begins Collecting Assessment

RESOLUTION NO.

Adopted by the Sacramento City Council

RESOLUTION DECLARING RESULTS OF MAJORITY PROTEST PROCEEDINGS

AND RENEWING SACRAMENTO TOURISM MARKETING
DISTRICT NO. 2024-01; CONFIRMING AND LEVYING ASSESSMENT, AND APPROVING DISTRICT BUDGET AND ASSESSMENT FOR FY 2024/25

BACKGROUND

A. The Sacramento Tourism Marketing District 2024-01 (STMD) was initially established in 2012 under the Property and Business Improvement District Law of 1994 (California Streets and Highways Code section 36600 et seq.) (referred to as the “PBID Law”) by City Council for a five-year term. It was then renewed in 2017 for a ten-year term that is set to expire in 2027.

B. Lodging business owners within the boundaries of the STMD have submitted petitions to the City of Sacramento to renew the STMD for a ten-year term running from July 1, 2024 through June 30, 2034. The renewed STMD includes all lodging businesses, existing and in the future, available for public occupancy, located within the boundaries of the City of Sacramento and a portion of the unincorporated area of the County of Sacramento. The STMD boundary does not include the cities of Citrus Heights, Elk Grove, Folsom, Galt, Isleton, or Rancho Cordova. The STMD has been divided up into four (4) benefit zones, as shown on the boundary map in the attached Management District Plan (MDP) attached hereto as Exhibit A.

Included with the petitions was a summary of the MDP that describes the proposed assessment to be levied on businesses within the STMD and the proposed services to be provided. Accordingly, renewal of the District by the City Council is sought in accordance with Streets and Highways Code section 36660.

C. Section 36620.5 of the PBID Law authorizes cities to renew business improvement districts including territory within a County upon said County’s consent. The City has requested and received consent from the County of Sacramento to include territory within its jurisdiction in the proposed renewed STMD.

D. On March 26, 2024, at the place set forth in the joint notice of public meeting and public hearing mailed to all business owners within the STMD to be renewed, the City Council held a public hearing on the proposed assessment. During the public hearing, the City Council: (1) heard all protests against the proposed assessment from business owners within the STMD; and (2) accepted testimony from all interested persons, whether or not they own businesses within the STMD.

BASED ON THE FACTS SET FORTH IN THE B ACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The Background statements above are true and correct.

Section 2. The proposed services for the renewed STMD include the following: 1) producing print ads, brochures, and flyers; 2) posting on social media; and 3) marketing campaigns and industry partnerships. All of these services are intended to promote the area within the STMD as a destination for tourism, conventions, meetings, and events, and increase room night sales for the assessed lodging businesses. The MDP proposes to fund these services through the levy of an assessment on lodging businesses within the STMD.

All activities are defined within the MDP, attached hereto as Exhibit A and on file with the Infrastructure Finance division of the Department of Finance, designated by the City Clerk to be repository of documents associated with special districts.

Section 3. The annual assessment rate for the proposed renewal term of the STMD is a percentage of gross short-term sleeping room rental revenue on lodging businesses within the STMD (varied by benefit zone), as described in further detail in the MDP. Based on the benefit received, assessments will not be collected on stays of more than 30 consecutive days. The initial annual assessment proposed for each zone is as follows: Zone 1: 3.45%, Zone 2:

2.875%, Zone 3: 2.30%, and Zone 4: 1.15%. The total amount of the proposed assessments for the first year of the STMD’s renewal term is approximately $9,540,000. Annually, the STMD Committee (“Committee”) may increase the assessment rate incrementally, up to the maximum allowable rates for each zone as specified in the MDP. The members of the Committee are defined in the MDP. The assessment rate may also be decreased by the Committee, but shall not drop below the initial assessment rates for each zone listed in the MDP.

Section 4. Businesses in the STMD will be subject to amendments to the PBID Law.

Section 5. Bonds will not be issued for the STMD.

Section 6. A description of the exterior boundaries of the proposed renewed STMD is contained in the MDP, which is attached hereto and incorporated herein as Exhibit A.

Section 7. The services to be provided will benefit businesses in the STMD and will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the STMD; to provide activities or improvements outside the STMD; or for any purpose other than the purposes specified the Resolution of Intention, this Resolution of Renewal, and the MDP. Notwithstanding the foregoing, improvements and activities that must be provided outside the STMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the area within the STMD.

Section 8. The assessments for the renewed STMD will be levied on lodging businesses within the STMD. The activities funded by the assessment will provide a specific benefit to assessed businesses within the STMD that is not provided to those not paying the assessment.

Section 9. The business owners who signed the petitions will collectively pay more than 50% of the proposed assessment. On February 6, 2024, the City Council adopted Resolution No. 2024-0027 entitled “Resolution of Intention to Renew the Sacramento Tourism Marketing District No. 2024-01.” As part of the City Council’s action, the dates and times of the public meeting and public hearing were identified as follows: March 12, 2024, at 5:00 pm and March 26, 2024, at 5:00 pm, with both events taking place in the City Council chambers, New City Hall, 915 “I” Street (first floor), Sacramento, California, respectively. The City Clerk was directed to provide notice to affected business owners in accordance with Streets and Highways Code Section 36623(b) and Government Code Section 54954.6.

Section 10. Staff in the Infrastructure Finance Division of the Finance Department mailed Joint Public Meeting and Public Hearing notices, on the City Clerk’s behalf, to affected business owners in the proposed STMD on February 8, 2024 and signed an affidavit confirming compliance with the legal requirement for mailing the joint notices. Relying on this affidavit, the City Council finds that a joint public meeting and public hearing notice was mailed to each business owner of identified parcels within the territory of the STMD, as ordered by Resolution No. 2024-0027 and as required by the PBID Law.

Section 11. The City Clerk has received, been given custody of, and tabulated the protests submitted and not withdrawn by the owners of businesses located within the STMD. The City Clerk has reported the results of the tabulation by her written Certificate to the City Council. The Clerk’s Certificate of Results for the Business Owner Majority Protest Proceeding specifies the protests that were submitted to the City Clerk, and not withdrawn, prior to the close of the public hearing on March 26, 2024. The protest for each business is weighted according to the proportional financial obligation of each business.

The weight of the total compliant protests received and not withdrawn represents less than 50% of the total assessment proposed to be levied in the STMD. Therefore, a majority protest against the proposed assessment does not exist.

Section 12. The Resolution of Intention stated the City Council’s finding that the MDP satisfied all requirements of Streets and Highways Code Section 36622. The City Council hereby approves the MDP on the proposal to levy an annual assessment on lodging businesses within the STMD. The MDP is attached hereto as Exhibit A and on file with the Infrastructure Finance Division of the Finance Department.

Section 13. The City Council hereby renews the STMD for a ten-year term beginning July 1, 2024, with an expiration date of June 30, 2034, for the territory described in the MDP, which is attached hereto as Exhibit A and by this reference made a part of this resolution.

Section 14. The City Council hereby confirms the assessment methodology specified in the MDP and the City Council levies the assessments detailed in the MDP on lodging businesses within the STMD to fund the services described in the MDP. In accordance with Streets and Highways Code Section 36631 and the MDP, the assessment to fund the activities and improvements for the STMD will be collected on a monthly basis (including any delinquencies, interest, and overdue charges) from each assessed lodging business located in the boundaries of the STMD.

Section 15. The City Council hereby approves the annual budget and lodging business assessments for the STMD renewal term as set forth in the MDP.

Section 16. The City Manager or City Manager’s designee is hereby directed to take all necessary actions to complete the renewal of the STMD and levy the assessments.

Section 17. Exhibit A is a part of this resolution.

Table of Contents:

Exhibit A: MDP

STMD Management District Plan 1
March 22, 2024

2024-2034
Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

March 22, 2024

SACRAMENTO TOURISM

MARKETING DISTRICT

MANAGEMENT DISTRICT PLAN

STMD Management District Plan 2
March 22, 2024

Contents
I. OVERVIEW ........................................................................................................................................ 3 II. BACKGROUND ................................................................................................................................ 5 III. ACCOMPLISHMENTS ..................................................................................................................... 6 IV. BOUNDARY ....................................................................................................................................... 8 V. ASSESSMENT BUDGET AND SERVICES .............................................................................. 11 A. Annual Service Plan ........................................................................................................................... 11 B. Annual Budget .................................................................................................................................... 13 C. California Constitutional Compliance ............................................................................................. 14 D. Assessment .......................................................................................................................................... 15 E. Interest and Overdue Charges .......................................................................................................... 17 F. Time and Manner for Collecting Assessments .............................................................................. 17 VI. GOVERNANCE ............................................................................................................................... 18 A. Owners’ Association .......................................................................................................................... 18 B. Committee Structure .......................................................................................................................... 18 C. Brown Act and California Public Records Act Compliance ........................................................ 18 D. Annual Report .................................................................................................................................... 18 APPENDIX 1 – LAW .................................................................................................................................... 20 APPENDIX 2 – ASSESSED BUSINESSES ............................................................................................. 31 APPENDIX 3 – ZONE BENEFITS (ZB) ................................................................................................ 38

Prepared by
Civitas

(800)999-7781
www.civitasadvisors.com

STMD Management District Plan 3
March 22, 2024
I. OVERVIEW

Developed by Visit Sacramento (VS), and Sacramento lodging businesses, the Sacramento Tourism Marketing District (STMD) is an assessment district proposed to continue to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed lodging businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors. The STMD was created in 2012 for a five (5) year term and subsequently renewed in 2017 for a ten (10) year term. Visit Sacramento and Sacramento lodging businesses now wish to renew the STMD for an additional ten (10) year term.

Location: The renewed STMD includes all lodging businesses, existing and in the future, available for public occupancy, located within the boundaries of the City of Sacramento and a portion of the unincorporated area of the County of Sacramento, as shown on the map included in Section IV of this Plan. The STMD boundary does not include the cities of Citrus Heights, Elk Grove, Folsom, Galt, Isleton, or Rancho Cordova. The STMD has been divided up into four (4) benefit zones, as shown on the boundary map and described in the detailed descriptions provided in Section IV.

Services: The STMD is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales. Marketing and sales promotions will increase demand for overnight tourism and market payors as tourist, meeting, and event destinations, thereby increasing demand for room night sales.

Budget: The total STMD annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $ 9,540,000. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do, as businesses open and close, and if assessment rates are increased or decreased as detailed in Section V.

Cost: The annual assessment rate is a percentage of gross short-term sleeping room rental revenue on lodging businesses, varied by benefit zone . The initial annual assessment rate for each zone is shown in the table below. Based on the benefit received, assessments will not be collected on stays of more than thirty (30) consecutive days.

Initial Zone Assessment Rates
Zone Assessment Rate
Zone 1 3.45%
Zone 2 2.875%
Zone 3 2.30%
Zone 4 1.15%

Annually, the STMD Committee (Committee) may increase the assessment rate incrementally, up to the maximum allowable rates for each zone as follows: the assessment rate in Zone 1 shall not exceed 4%; the assessment rate in Zone 2 shall not exceed 3.33%; the assessment rate in Zone 3 shall not exceed 2.66%; and the assessment rate in Zone 4 shall not exceed 1.33% , as detailed in Section V(D) . The assessment rate may also be decreased by the Committee, but shall not drop below the initial assessment rates for each zone listed above.

STMD Management District Plan 4
March 22, 2024
Collection: The City and County will be responsible for collecting the assessment on a monthly basis (including any delinquencies, interest, and overdue charges) from each assessed lodging business located in the boundaries of the STMD . The City and County shall take all reasonable efforts to collect the assessments from each assessed lodging business.

Duration: The renewed STMD will have a ten (10) year life, beginning July 1, 2024, or as soon as possible thereafter, and ending ten (10) years from its start date. After ten (10) years, the STMD may be renewed pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq. (94 Law) if lodging business owners support continuing the STMD programs.

Management: Visit Sacramento shall continue to serve as the STMD ’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Management District Plan (Plan) and must provide annual reports to the City Council.

STMD Management District Plan 5
March 22, 2024
II. BACKGROUND

TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit. In recent years, other states have begun adopting the California model – Illinois, Minnesota, Massachusetts, Montana, South Dakota, Washington, Colorado, Texas, and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TMD . Additionally, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law.

California’s TMDs collectively
raise over $300 million
annually for local destination
marketing. With competitors
raising their budgets, and
increasing rivalry for visitor
dollars, it is important
that Sacramento lodging
businesses continue to invest
in stable, commerce-specific
marketing programs.

TMDs utilize the efficiencies
of private sector operation in
the market -based promotion
of tourism districts. TMDs allow lodging business owners to organize their efforts to increase commerce. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase commerce.

In California, most TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.

There are many benefits to TMDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion.

STMD Management District Plan 6
March 22, 2024
III. ACCOMPLISHMENTS

Visit Sacramento is charged with generating tourism -driven economic impact to the City and unincorporated County of Sacramento.

Historically, Visit Sacramento has driven tourism primarily through meetings and conventions. While those elements remain the biggest driver of tourism to the region, Visit Sacramento has significantly grown Sacramento’s tourism market share by creating music festivals like Aftershock and GoldenSky, food events like the Tower Bridge Dinner, Legends of Wine, and the Farm -to-Fork Festival, and by attracting sporting events like The World’s Strongest Man and IRONMAN. Annually, the organization produces more than 300,000 hotel room nights and plays a direct role in driving all Transient Occupancy Tax collections for the City and County of Sacramento.

Visit Sacramento drives convention and meetings tourism through the following STMD funded programs:
• Attending industry tradeshows
• Attending and/or hosting sales missions and sales calls • Organizing and hosting client familiarization trips to Sacramento • Contracting with third- party and DMO partnerships to identify additional national associations
• Targeted outreach to ethnic and LGBTQ meeting planners • Prospecting for potential meetings and conventions through innovative marketing campaigns, practices, personal relationships, and industry partnerships • Mining existing and new data in customer management system to target and re -target customers
• Attending trade shows throughout the calendar year: More than 30 national events annually • Participating in tour operator sales missions -domestic and international: i.e., Visit California events
• Offering financial and in-kind Incentives
• Offering bid support to convention, sports groups, and festivals that drive visitation to the market

Sports Tourism
• Engage with sports organizations and venue partners to identify and secure high profile amateur sporting events including a variety of NCAA events, USA Track & Field, Senior Softball, IRONMAN, international rugby and soccer, and others. • Consistently drive more than 100,000 hotel room nights via sporting events

Leisure/Culinary Travel
• Drive Leisure visitors to Sacramento through targeted marketing campaigns centered around special events, general weekend leisure travel, holiday periods (e.g., Old Sacramento Theatre of Lights at Christmas)
• Maintain booking and marketing relationship with Expedia.com to drive and measure leisure travel room nights
• Target and aggressively pursue national and international food and agriculture conferences and conventions
• Attract outside food publications/national media to write about Sacramento’s culinary scene • Attract and work with food-centric organizations like The Michelin Guide • Participate in co-operative marketing opportunities with other DMOs like Visit California STMD Management District Plan 7
March 22, 2024
• Develop integrated media campaigns designed to spotlight the Sacramento region • Develop features on the website Sacramento365.com to drive (and track) hotel bookings and to educate residents on the region’s events activities

Marketing
• Convention Marketing: Annual campaigns that target Convention trade media and digital campaigns to attract groups that our city can accommodate (i.e. our convention center is big enough and we have the required number of hotel rooms)
• Travel professionals-print: Group Tour media
• Leisure travel-digital: Expedia, social media platforms (Instagram, Facebook, Twitter, TikTok, etc.), broadcast and display media buys in Bay Area, Southern/Central/Northern California, Nevada and other drive-time destinations
• Produce consistent social, video, digital and podcast content designed to inspire and entice visitors
• Market to interest-specific groups: e.g. family, Millennials, mature, LGBTQ, Hispanic, food & wine, outdoor
• Drive media coverage in the U.K. and Germany through targeted public relations • Retain public relations representation in NYC to drive national media on Sacramento and host writers and events like Farm-to-Fork, Aftershock, GoldenSky, etc.

STMD Management District Plan 8
March 22, 2024
IV. BOUNDARY

The STMD will continue to include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Sacramento and a portion of the unincorporated area of the County of Sacramento, as shown in the map on the following page. The STMD boundary does not include the cities of Citrus Heights, Elk Grove, Folsom, Galt, Isleton, or Rancho Cordova.

Lodging business means: any structure, or any portion of any structure that is permitted by the City or County of Sacramento for short -term rentals , which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, motel, vacation rental, home sharing unit, or other similar structure or portion thereof. This definition was chosen to ensure that the specific benefits conferred by the ST MD are provided only to the lodging businesses to be assessed and not to other businesses not assessed.

Transient means : any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. Any such person so occupying space in a lodging business shall be deemed to be a transient until the period of thirty (30) days has expired unless there is an agreement in writing between the operator and the occupant providing for a longer period of occupancy. In determining whether a person is a transient, uninterrupted periods of time extending both, prior and subsequent to the effective date of this Plan may be considered.

A complete listing of assessed lodging businesses within the renewed STMD can be found i n Appendix 2. The lodging business list was compiled from records provided by each jurisdiction. The list was developed with the most reliable information provided, however, the list may contain discrepancies due to any of the following reasons: 1)The short -term vacation rentals included in the list are businesses that have obtained a permit or license to operate as a short -term vacation rental at the time of formation, and does not include short -term vacation rentals that are not permitted or licensed to operate as a short-term vacation rental; 2) Vacation rentals may cease operation with little or no notice, and may no longer be operating as a short -term rental; and 3) the short -term vacation rental list was compiled based on the dates shown in Appendix 2, and may not include short-term vacation rentals that began operation after the dates listed.

The STMD is divided into four (4) benefit zones, based on the special benefits and privileges granted to lodging businesses in each zone. The boundaries of each zone are shown in the map on the following page. A description of the boundaries of each zone is provided below:

Zone 1: Includes Old Town, Downtown, and Midtown Sacramento. The western boundary is the Sacramento River; the northern boundary is the American River; the eastern boundary is Alhambra Boulevard; and the southern boundary is Highway 50.

Zone 2: Includes Noralto, Del Paso Heights, and the western portion of Arden Arcade. The western boundary is the Union Pacific Railroad; the northern boundary is Interstate 80; the eastern boundary is Watt Avenue; and the southern boundary is the American River.

Zone 3: Includes Gardenland, South Natomas, North Sacramento, North Natomas, and the Sacramento International Airport. The western boundary is the Sacramento River; the northern boundary is W Elverta Road between Garden Highway and Highway 99, Highway 99 between STMD Management District Plan 9
March 22, 2024
W Elverta Road and W Elkhorn Boulevard, and W Elkhorn Boulevard between Highway 99 and the Union Pacific Railroad; the eastern boundary is the Union Pacific Railroad; and the southern boundary is the American River.

Zone 4: Includes all remaining areas of the City and County of Sacramento that have an eastern boundary that runs along the western boundary of the city of Citrus Heights and runs southwest along Auburn Blvd before going south on Garfield Avenue. It continues to run along the city limits for Rancho Cordova after Garfield Avenue ends until Bradshaw Road. When Bradshaw Road intersects with Jackson Road the boundaries head west on Jackson Road where it heads south along the city limits of Sacramento before heading further south on Power Inn Road. When Power Inn Road intersects with the city limits of Elk Grove it runs west along the city limits of Elk Grove until meeting Interstate 5. It then runs southeast until it intersects with the Consumes River. The boundaries continue south along Consumes River until it reaches the County of Sacramento limits. The area west of Interstate 5 is included in the STMD with the exception of the city of Isleton.

STMD Management District Plan 10
March 22, 2024

STMD Management District Plan 11
March 22, 2024
V. ASSESSMENT BUDGET AND SERVICES

The assessment rate in each zone will be commensurate with privileges and services provided to assessed lodging businesses in each zone, as detailed in Appendix 3. If the assessment rate in any two (2) zones are equal, the privileges and services provided to assessed lodging businesses in those zones will be the same.

A service plan assessment budget has been developed to deliver services that benefit the assessed lodging businesses. A detailed annual assessment budget will be developed and approved by the Committee and the VS Board of Directors . The chart below illustrates the initial annual assessment budget allocations. These activities and allocations will also apply in subsequent years. The total initial assessment budget is estimated to be $9,540,000.

Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the VS Board of Directors shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed programs and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the STMD, any and all assessment funds may be used for the costs of defending the STMD.

Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to Sales & Marketing,
$9,253,800 , 97%
City & County Collection
Fee, $190,800 , 2%
Administration,
Contingency &
Renewal, $95,400 ,
1%
Initial Annual Assessment Budget -
$9,540,000
STMD Management District Plan 12
March 22, 2024
multiple budget categories. The staffing levels necessary to provide the services below will be determined by VS on an as- needed basis.

Sales and Marketing
A sales and marketing program will promote assessed lodging businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Sacramento as a desirable place for overnight visits. The program w ill have the goal of increasing demand for overnight visitation and room night sales at assessed lodging businesses, and may include but is not limited to, the following activities:
• Marketing promotion through paid ads, earned and social media, and collateral materials to drive demand for overnight visitation and room sales and to increase awareness of tourist attractions and events in Sacramento;
• Attendance at 30+ national trade shows and professional industry conferences and events annually, by the Visit Sacramento Convention Sales and Services team, to meet with certified meeting planners in order to gather new convention RFPs to drive demand for conventions and the associated room sales for assessed lodging businesses; • Visit Sacramento’s Sports & Entertainment and Convention Sales and Services staff will attend industry trade shows and work directly with third party convention planning organizations (e.g. Helms Briscoe, Conference Direct) and national event promoters to generate business leads that will result in attracting national conventions and large leisure travel group events , such as music and food festivals and amateur sporting events; and • Communications and advocacy activities to inform and educate key stakeholders and the public;
• Internet marketing efforts to increase awareness and optimize internet presence to drive demand for overnight visitation and room sales to assessed lodging businesses; • Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive demand for overnight visitation and room sales to assessed lodging businesses; • Sales blitzes and campaigns, including meetings with potential tourism customers, for assessed lodging businesses;
• Familiarization tours of assessed lodging businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed lodging businesses;
• Visit Sacramento staff will meet regularly with Directors of Sales, General Managers, owners, and other lodging representative s to plan, communicate, collaborate, and report results on coordinated tourism promotion efforts for assessed lodging businesses; and • Development and maintenance of a website designed to promote assessed lodging businesses.

City and County Administration Fee
The City of Sacramento and the County of Sacramento shall be paid a fee equal to two percent (2%) of the amount of assessment collected, within their respective jurisdictions, to cover their costs of collection and administration.

Administration, Contingency and Reserve
The administration, contingency and reserve budget shall be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal, and accounting fees. The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration, or renewal costs at the discretion of VS. Policies relating to contributions to the reserve STMD Management District Plan 13
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fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the VS Board of Directors. The reserve fund may be used for the costs of renewing the STMD.

B. Annual Budget
The total ten (10) year assessment budget is projected at approximately $ 9,540,000 annually, or $95,400,000 through 2034 if assessment rates are not increased. I f the maximum assessment rate increases are adopted , the estimated total assessment budget through 2034 is $ $108,837,090. This budget is expected to fluctuate as room sales do, as businesses open and close, a nd if the assessment rate is increased or decreased pursuant to this Plan. The initial assessment rate for each zone is demonstrated in the following chart:

Initial Zone Assessment Rates
Zone Assessment Rate
Zone 1 3.45%
Zone 2 2.875%
Zone 3 2.30%
Zone 4 1.15%

Annually, the Committee may increase the assessment rate incrementally, up to the maximum allowable rates for each zone as follows: the assessment rate in Zone 1 shall not exceed four percent (4%); the assessment rate in Zone 2 shall not exceed 3.33%; the assessment rate in Zone 3 shall not exceed 2.66%; and the assessment rate in Zone 4 shall not exceed 1.33%. The assessment rate may also be decreased by the Committee, but shall not drop below the initial assessment rates for each zone listed above.

The table below demonstrates the estimated maximum assessment budget, using the highest possible assessment rate, with the assumption that the assessment rate will be increased at the earliest opportunity as it is a required disclosure, it is not the anticipated course of action. Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Plan.

Estimated Annual Assessment Budget if Maximum Assessment Rates Are Adopted

Fiscal
Year
Sales &
Marketing
Collection
Fee
Administration,
Contingency
& Reserve
Total
2024/2025 $9,253,800 $190,800 $95,400 $9,540,000
2025/2026 $10,702,020 $220,660 $110,330 $11,033,010
2026/2027 $10,702,020 $220,660 $110,330 $11,033,010
2027/2028 $10,702,020 $220,660 $110,330 $11,033,010
2028/2029 $10,702,020 $220,660 $110,330 $11,033,010
2029/2030 $10,702,020 $220,660 $110,330 $11,033,010
2030/2031 $10,702,020 $220,660 $110,330 $11,033,010
2031/2032 $10,702,020 $220,660 $110,330 $11,033,010
2032/2033 $10,702,020 $220,660 $110,330 $11,033,010
2033/2034 $10,702,020 $220,660 $110,330 $11,033,010
Total $105,571,980 $2,176,740 $1,088,370 $108,837,090 STMD Management District Plan 14
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The table below demonstrates the estimated maximum assessment budget with the assumption that the rates will not be increased during the STMD’s term.

Estimated Annual Assessment Budget if Maximum Assessment Rates Are Not Adopted

Fiscal
Year
Sales &
Marketing
Collection
Fee
Administration,
Contingency
& Reserve
Total
2024/2025 $9,253,800 $190,800 $95,400 $9,540,000
2025/2026 $9,253,800 $190,800 $95,400 $9,540,000
2026/2027 $9,253,800 $190,800 $95,400 $9,540,000
2027/2028 $9,253,800 $190,800 $95,400 $9,540,000
2028/2029 $9,253,800 $190,800 $95,400 $9,540,000
2029/2030 $9,253,800 $190,800 $95,400 $9,540,000
2030/2031 $9,253,800 $190,800 $95,400 $9,540,000
2031/2032 $9,253,800 $190,800 $95,400 $9,540,000
2032/2033 $9,253,800 $190,800 $95,400 $9,540,000
2033/2034 $9,253,800 $190,800 $95,400 $9,540,000
Total $9,253,800 $1,908,000 $954,000 $95,400,000

C. California Constitutional Compliance
The STMD assessment is not a property-based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property. 1 Rather, the STMD assessment is a business- based assessment and is subject to Proposition 26.

Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions. Two of these exceptions apply to the STMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City and County of conferring the benefits or providing the services.

1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “ a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public , businesses in general, or parcels of land, but rather to serve the specific businesses within the STMD. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed lodging businesses within the boundaries of the STMD, and are narrowly tailored. STMD funds will be used exclusively to provide the specific benefit of increased demand for room night sales directly to the assessees. Assessment funds shall not be used to feature non- assessed lodging businesses in STMD programs, or to directly generate sales for non -assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed lodging businesses. Nothing in this Plan limits the ability of the Owners’ Association to enter into

1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
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private contracts with non- assessed lodging businesses for the provision of services to those businesses.

The assessment imposed by this STMD is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in demand for room night sales. The specific benefit of an increase in demand for room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the STMD assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased demand for room night sales to the assessed lodging businesses.

2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product .”3 The legislature has recognized that marketing and promotions services like those to be provided by the STMD are government services within the meaning of Proposition 26 4. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.” 5 3. Reasonable Cost
STMD services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will continue to be managed by VS , and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from STMD-funded activities, be featured in advertising campaigns, and benefit from other STMD-funded services. Non -assessed lodging businesses will not receive these, nor any other, STMD -funded services and benefits.

The STMD-funded programs are all targeted directly at and feature only assessed lodging businesses.

It is, however, possible that there will be a spill over benefit to non -assessed businesses. If non- assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non-STMD funds. STMD funds shall only be spent to benefit the assessed lodging businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed lodging businesses.

D. Assessment
The a nnual assessment rate is a percentage of gross short -term sleeping room rental revenue on lodging businesses, varied by benefit zone. In Zone 1, the initial annual assessment rate is 3.45%; in Zone 2 the initial annual assessment rate is 2.875%; in Zone 3 the initial annual assessment rate is

2.30%; and in Zone 4 the initial annual assessment rate is 1.15%. Annually, the Committee may increase the assessment rate incrementally, up to the maximum allowable rates for each zone as

3 Cal. Const. art XIII C § 1(e)(2)
4 Government Code § 53758(b)
5 Government Code § 53758(b)
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follows: the assessment rate in Zone 1 shall not exceed 4%; the assessment rate in Zone 2 shall not exceed 3.33%; the assessment rate in Zone 3 shall not exceed 2.66%; and the assessment rate in Zone 4 shall not exceed 1.33%. The assessment rate may also be decreased by the Committee, but shall not drop below the initial assessment rates for each zone listed above and indicated in the chart below .

Based on the benefit received, assessments will not be collected on: stays of more th an thirty (30) consecutive days because STMD programs are only intended to increase short-term stays.

Initial Zone Assessment Rates
Zone Assessment Rate
Zone 1 3.45%
Zone 2 2.875%
Zone 3 2.30%
Zone 4 1.15%

The table below demonstrates the estimated maximum assessment rates, using the highest possible assessment rate, based on the assessment rate being increased at the earliest opportunity . The actual increases may vary subject to Committee direction. Alternate courses of action may be taken in regard to implementing the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Plan.

Fiscal Year Zone 1 Zone 2 Zone 3 Zone 4
2024/2025 3.45% 2.875% 2.30% 1.15%
2025/2026 4.00% 3.33% 2.66% 1.33%
2026/2027 4.00% 3.33% 2.66% 1.33%
2027/2028 4.00% 3.33% 2.66% 1.33%
2028/2029 4.00% 3.33% 2.66% 1.33%
2029/2030 4.00% 3.33% 2.66% 1.33%
2030/2031 4.00% 3.33% 2.66% 1.33%
2031/2032 4.00% 3.33% 2.66% 1.33%
2032/2033 4.00% 3.33% 2.66% 1.33%
2033/2034 4.00% 3.33% 2.66% 1.33%

The assessment was calculated based on the total cost of the activities to be provided for the benefit of the lodging businesses within the STMD , with costs allocated based on the proportional benefit conferred to each assessed lodging business. Activities funded by the STMD are specifically targeted to increase demand for room nights at assessed lodging businesses. All room night sales do not represent the same benefit to the payors. For example, a higher priced room night is of greater benefit than a lower priced room night because the assessment derives greater revenue. To account for this benefit differential and to make sure the benefits are proportional, an assessment formula based on a percentage of revenue has been selected. The proposed formula accurately reflects greater benefit to assessed lodging businesses with higher priced room nights.

The term “ gross short-term sleeping room rental revenue” as used herein means: the consideration charged whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever. Gross short-term sleeping room rental revenue shall not include, and therefore the assessment shall not be charged upon, stays that are complimentary, or upon any federal, state, or local taxes collected, including but not limited to transient occupancy taxes.

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The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each t ransient shall receive a receipt for payment from the business . If the STMD assessment is identified separately it shall be disclosed as the “STMD Assessment.” As an alternative, the disclosure may include the amount of the STMD assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for calculation of transient occupancy taxes.

Bonds shall not be issued.

E. Interest and Overdue Charges
The STMD shall reimburse the City and County of Sacramento for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent STMD assessment are sought to be recovered in the same collection action by the City or County, the STMD shall bear its pro rata share of such collection costs. Assessed lodging businesses which are delinquent in paying the assessment shall be responsible for paying:

1. Original Delinquency: Any lodging business that fails to remit any assessment imposed within the time required shall pay a charge of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.

2. Continued Delinquency: Any lodging business that fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency charge of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) charge first imposed.

3. Fraud: If the City or County determines that the nonpayment of any remittance due is due to fraud, a charge of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the charges stated in subsections 1 and 2 of this section E.

4. Interest: In addition to the charges imposed, any lodging business that fails to remit any assessment imposed shall pay interest at the rate of one-half of one percent (0.5%) per month or fraction thereof on the amount of the assessment, exclusive of overdue charges , from the date on which the remittance first became delinquent until paid.

5. Overdue Charges Merged with Assessment: Every charge imposed and such interest as accrues under the provisions of this section shall become a part of the assessment herein required to be paid.

F. Time and Manner for Collecting Assessments
The STMD assessment will be implemented beginning July 1, 2024, or as soon as possible thereafter, and ending ten (10) years from its start date. The City and County of Sacramento will be responsible for collecting the assessment on a monthly basis (including any delinquencies, interest and overdue charges) from each assessed lodging business located in their respective jurisdictions. The City and County shall take all reasonable efforts to collect the assessments from each assessed lodging business.

The City and County shall forward the assessments collected to the Owners’ Association.

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VI. GOVERNANCE

A. Owners’ Association
The City Council , through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the O wners’ Association of the STMD as defined in Streets and Highways Code §36612. The City Council has determined that VS will continue to serve as the Owners’ Association for the STMD. VS has authorized the STMD Committee (Committee) to continue to manage STMD funds and activities as detailed below.

B. Committee Structure
The Committee will continue to be charged with preparing and approving the budget for STMD funds and programs. The Committee will continue to be operated in accordance with the following guidelines.

1. The Committee shall have at least seven (7) and no more than eleven (11) members. All committee members shall be representatives of assessed lodging businesses. Reasonable efforts shall be undertaken to include representatives from each zone based on the approximate contributions by zone.

2. All Committee members shall serve three (3)year terms.

3. Committee members may serve two (2) consecutive three (3) year terms plus one (1) partial term (less than three [3] years) if selected to fill a mid -term vacancy. No Committee member who has served two (2) full consecutive three (3) year terms shall be el igible for reappointment until one (1) year has intervened from the date of retirement from the Committee. Each Committee member shall serve until expiration of the term for which appointed and until a successor has been appointed.

4. Committee members, including those selected to fill vacancies, shall be selected by the Sacramento Hotel Association’s Board of Directors. Committee members shall select a Chairperson, Vice Chairperson, and such other Committee officers as the Committee shall deem necessary.

5. No fewer than fifty percent (50%) of VS’s Executive Committee shall be representatives of lodging businesses paying the STMD assessment.

6. All members of the Committee shall be members of the VS Board of Directors.

C. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the Board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act.

D. Annual Report
VS shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:

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• Any proposed changes in the boundaries of the district or in any benefit zones or classification of businesses within the district.
• The programs and activities to be provided for that fiscal year. • An estimate of the cost of providing the programs and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient deta il to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

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APPENDIX 1 – LAW

*** THIS DOCUMENT IS CURRENT THROUGH THE 2023 SUPPLEMENT *** (ALL 2022 LEGISLATION)

STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW OF 1994

CHAPTER 1. General Provisions

ARTICLE 1. Declarations

36600. Citation of part

This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.”

36601. Legislative findings and declarations; Legislative guidance

The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts. (b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.

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Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits.

The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits.

Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.

36602. Purpose of part

The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.

36603. Preemption of authority or charter city to adopt ordinances levying assessments

Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).

36603.5. Part prevails over conflicting provisions

Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.

36604. Severability

This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.

ARTICLE 2. Definitions

36606. “Activities”

“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district.

36606.5. “Assessment”

“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.

36607.
“Business”

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“Business” means all types of businesses and includes financial institutions and professions.

36608. “City”

“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California.

36609. “City council”

“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part.

36609.4. “Clerk”

“Clerk” means the clerk of the legislative body.

36609.5. “General benefit”

“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.

36610. “Improvement”

“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.

36611. “Management district plan”; “Plan”

“Management district plan” or “plan” means a proposal as defined in Section 36622.

36612. “Owners’ association”

“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, disc ussed, or deliberated, and with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district.

36614.
“Property”

“Property” means real property situated within a district.

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36614.5. “Property and business improvement district”; “District”

“Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.

36614.6. “Property-based assessment”

“Property-based assessment” means any assessment made pursuant to this part upon real property.

36614.7. “Property-based district”

“Property-based district” means any district in which a city levies a property-based assessment.

36615. “Property owner”; “Business owner”; “Owner”

“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.

36615.5. “Special benefit”

(a) “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.

(b) “Special benefit” also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general.

36616. “Tenant”

“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.

ARTICLE 3. Prior Law

36617. Alternate method of financing certain improvements and activities; Effect on other provisions

This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.

CHAPTER 2. Establishment

36620. Establishment of property and business improvement district

A property and business improvement district may be established as provided in this chapter.

36620.5. Requirement of consent of city council

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A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.

36621. Initiation of proceedings; Petition of property or business owners in proposed district

(a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.

The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied. (b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.

36622. Contents of management district plan

The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries.
(b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part. (d) The improvements, maintenance, and activities proposed for each year of operation of the district and the estimated cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a STMD Management District Plan 25
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statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shal l satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against their property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k)
(1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof. (2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property -based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property -based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (3) In a property -based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (l) In a property- based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (m) Any other item or matter required to be incorporated therein by the city council.

36623.

Procedure to levy assessment

(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the STMD Management District Plan 26
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public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.

36624. Changes to proposed assessments

At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclu de territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.

36625. Resolution of formation

(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.

Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district.

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(7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property- based district, that property within the district will receive a special benefit.
(8) In a property -based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.

36627. Notice and assessment diagram

Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.

36628. Establishment of separate benefit zones within district; Categories of businesses

The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone.

36628.5. Assessments on businesses or property owners

The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property- based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.

36629. Provisions and procedures applicable to benefit zones and business categories

All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district.

36630. Expiration of district; Creation of new district

If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.

CHAPTER 3. Assessments

36631. Time and manner of collection of assessments; Delinquent payments

The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.

36632.

Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property

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(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of det ermining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.

36633. Time for contesting validity of assessment

The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.

36634. Service contracts authorized to establish levels of city services

The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed.

36635. Request to modify management district plan

The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter.

36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention

(a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.

36637. Reflection of modification in notices recorded and maps

Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.

CHAPTER 3.5. Financing

36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments

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(a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks -Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.

CHAPTER 4. Governance

36650. Report by owners’ association; Approval or modification by city council

(a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used.
(b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.

The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district.

36651. Designation of owners’ association to provide improvements, maintenance, and activities

The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.

CHAPTER 5. Renewal
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36660. Renewal of district; Transfer or refund of remaining revenues; District term limit

(a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.

CHAPTER 6. Disestablishment

36670.

Circumstances permitting disestablishment of district; Procedure

(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30 -day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continu e for 30 days. The next such 30- day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention.

36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district

(a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan. (b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

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APPENDIX 2 – ASSESSED BUSINESSES

Business Name Business Address City State Zip
Alex Pakter 15433 Andrus Island Rd Isleton CA 95641
Alfatly 6542 Matterhorn Dr Sacramento CA 95842
Amanda Mahbobi 3310 Brookwood Road Sacramento CA 95821
American Inn 626 16th St Sacramento CA 95814
Arden Acres 2421 Clay St Sacramento CA 95815
Arden Star Hotel 1413 Howe Avenue Sacramento CA 95825
B & W Resort Marina 964 Brannan Island Rd Isleton CA 95641 Best Budget Inn 986 El Camino Ave Sacramento CA 95815
Best Six Motel 5969 Stockton Blvd Sacramento CA 95817
Best Western Capital City 15 Massie Ct Sacramento CA 95823 Budget Inn & Suites 3721 Watt Ave Sacramento CA 95821
Capital City Inn 430 16th St Sacramento CA 95814
Chang Guo 3544 Eisenhower Dr Sacramento CA 95826
Chris Webb 2106 Trimble Way Sacramento CA 95825
Citizen Hotel 926 J St Sacramento CA 95814
Comfort Inn & Suites 21 Howe Ave Sacramento CA 95826
Comfort Suites 226 Jibboom St Sacramento CA 95811
Congress Hotel 916 12th St Sacramento CA 95814
Courtyard Sac - Cal Expo 1782 Tribute Rd Sacramento CA 95815 Courtyard Sac - Sacramento 4422 Y St Sacramento CA 95817 Crossroads Inn 221 Jibboom St Sacramento CA 95811
Deville Motel 2756 Stockton Blvd Sacramento CA 95817
Doubletree 2001 Point West Way Sacramento CA 95815
Econolodge Downtown 711 16th St Sacramento CA 95814
Economy Inn 939 El Camino Ave Sacramento CA 95815
Embassy Suites 100 Capitol Mall Sacramento CA 95814
Exchange Hotel, Curio 1006 4th St Sacramento CA 95814
Executive Inn & Suites - Bannon 216 Bannon St Sacramento CA 95811 Extended Stay America - Gateway 2810 Gateway Oaks Dr Sacramento CA 95833 Extended Stay America - Harvard 2100 Harvard St Sacramento CA 95815 Extended Stay America - Rosin 3825 Rosin Ct Sacramento CA 95834 Fairfield Inn 1780 Tribute Rd Sacramento CA 95815
Fairfield Inn & Suites - Natomas 2730 El Centro Road Sacramento CA 95833 Farhaz Mohammed 5133 Janell Way Carmichael CA 95608
Fort Sutter Tapestry 2726 Capitol Ave Sacramento CA 95816 Four Points by Sheraton 4900 Duckhorn Dr Sacramento CA 95834 Freedom Of Flow 9132 Feather River Way Sacramento CA 95826 Gold Star Inn 6610 Stockton Blvd Sacramento CA 95823
Governors Inn 210 Richards Blvd Sacramento CA 95811
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Grand Island Mansion 13415 Grand Island Rd Walnut
Grove
CA 95690
Greens Hotel - Del Paso 1700 Del Paso Blvd Sacramento CA 95815 Greens Hotel - Stockton 4331 Stockton Blvd Sacramento CA 95820 Hampton Inn & Suites 65th St 1875 65th St Sacramento CA 95819 Hampton Inn & Suites Natomas 3021 Advantage Way Sacramento CA 95834 Hampton Inn Suites 2230 Auburn Blvd Sacramento CA 95821 Henry Ung Inc 4940 Pasadena Ave Unit
#4
Sacramento CA 95841
Hilton Garden Inn Airport 20 Advantage Ct Sacramento CA 95834 Hilton Garden Inn Sacramento 2540 Venture Oaks Way Sacramento CA 95833 Hilton Sacramento 2200 Harvard St Sacramento CA 95815
Holiday Inn 300 J St Sacramento CA 95814
Holiday Inn Express Cal Expo 2224 Auburn Blvd Sacramento CA 95821 Holiday Inn Express Natomas 2981 Advantage Ln Sacramento CA 95834 Homewood Suites 3001 Advantage Way Sacramento CA 95834
Hyatt Centric 1122 7th St Sacramento CA 95814
Hyatt House 2719 K St Sacramento CA 95816
Hyatt Regency 1209 L St Sacramento CA 95814
Inn and Spa at Parkside 2116 6th St Sacramento CA 95818 Inn Off Capitol Park 1530 N St Sacramento CA 95814
Irish Cottage 3650 Los Alamos Way Sacramento CA 95864
Khanna Enterprises DBA Crowne
Plaza
5321 Date Ave. Sacramento CA 95841
Kimpton 500 J St Sacramento CA 95814
La Quinta Inn 4604 Madison Ave Sacramento CA 95841
La Quinta Inn 200 Jibboom St Sacramento CA 95811
Lakeside Escape 1014 Ski Park Court Rio Linda CA 95673
Larkspur Landing Hotel 555 Howe Ave Sacramento CA 95825 Lionsgate Hotel 3410 Westover St McClellan CA 95652
Locke B&B 13959 Main St Walnut
Grove
CA 95690
MBA Investments Team, LLC 2606 Park Hills Drive Sacramento CA 95821 McGregor 3040 Mountain View Ave Sacramento CA 95821
Med Park Inn & Suites 2356 Stockton Blvd Sacramento CA 95817 Mega Inn 4600 Watt Ave North
Highlands
CA 95660
Michael Farrace 3670 Fair Oaks Boulevard Sacramento CA 95864 Mina Geramian 1137 Singingwood Rd Sacramento CA 95864
Motel 6 College Town 7850 College Town Dr Sacramento CA 95826 Motel 6 Downtown 1415 30th St Sacramento CA 95816
Motel 6 Interstate 5110 Interstate Ave Sacramento CA 95842 Motel 6 Jibboom 227 Jibboom St Sacramento CA 95811
Motel 6 Sacramento South 7407 Elsie Ave Sacramento CA 95605 Motel 6/Studio 6 3796 Northgate Bl Sacramento CA 95834
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National Corp Housing
Oasis Inn 18 Massie Ct Sacramento CA 95823
Once Upon a Time Prop. LLC 13870 Hwy 160 (River Rd) Walnut Grove
CA 95690
Orchard Hospitality LLC 8058 Orchard Loop Ln Elk Grove CA 95624 Prestigious Arden Park Rental 4163 Los Coches Way Sacramento CA 95864 Quality Inn 7780 Stockton Blvd Sacramento CA 95823
Quality Inn - 15th St 818 15th St Sacramento CA 95814
Quality Inn - Jibboom 228 Jibboom St Sacramento CA 95811 Ramada Sacramento 2600 Auburn Blvd Sacramento CA 95821
Red Roof Inn 4325 Watt Ave Sacramento CA 95821
Residence Inn - Capital Bank 1121 15th St Sacramento CA 95814 Residence Inn - Natomas 2618 Gateway Oaks Dr Sacramento CA 95833 Residence Inn Sacramento #2 1530 Howe Ave. Sacramento CA 95825 Riverboat Delta King 1000 Front St Sacramento CA 95814
Roberta Walker 3037 Bertis Dr Sacramento CA 95821
Rochelle Gauthier 2775 Gold Point Way Sacramento CA 95827 Rodeway Inn - Howe 25 Howe Ave Sacramento CA 95826
Roy Inn 1319 30th St Sacramento CA 95816
Royal 8 Inn 6448 Stockton Blvd Sacramento CA 95823
Rumen Pancharevski 9046 Kiefer Blvd. Sacramento CA 95826 Sacramento 49er Travel Plaza 2828 El Centro Rd Sacramento CA 95833 Sacramento Element 3681 N Freeway Blvd Sacramento CA 95834 Sacramento Hostel 925 H St Sacramento CA 95814
Sacramento Natomas Courtyard 2101 River Plaza Dr Sacramento CA 95833 Sandman Motel 236 Jibboom Sacramento CA 95811
Sands Motel 2160 Auburn Blvd Sacramento CA 95821
Sheraton Grand 1230 J St Sacramento CA 95814
Sky Riders Motel 6100 Freeport Blvd Sacramento CA 95822 Springhill Suites Natomas 2555 Venture Oaks Way Sacramento CA 95833 Stardust Motel 8637 Folsom Blvd Sacramento CA 95826
Sterling Hotel 1300 H St Sacramento CA 95814
Super 8 - Airport 2654 El Centro Rd. Sacramento CA 95833 Super 8 - Madison 4317 Madison Ave. Sacramento CA 95842 Super 8 Motel - 55th 7216 55th St Sacramento CA 95823
Supreme Stay LLC 6920 Shady Woods Way Rio Linda CA 95673 Sure Stay - Cal Expo 1900 Canterbury Rd Sacramento CA 95815 SureStay - North 350 Bercut Dr Sacramento CA 95811
Surf Motel 3204 Auburn Blvd Sacramento CA 95821
Suzanne Goldschmidt Airbnb 3331 Cosmos Ave Sacramento CA 958645603 The Delta Estate 19900 Sherman Island
Cross Rd
Rio Vista CA 94571
The Villas at Arden Hills 1210 Arden Hills Lane Sacramento CA 95864 TownePlace Suites - Cal Expo 1784 Tribute Rd Sacramento CA 95815 STMD Management District Plan 34
March 22, 2024
TownePlace Suites - Natomas 4090 E Commerce Way Sacramento CA 95834 Travelodge 9646 Micron Ave Sacramento CA 95827
Travelodge (fka Inn at Capitol) 623 16th St Sacramento CA 92814 Utterback Short Term Rental 2335 Maryal Dr Sacramento CA 95655 Vagabond Inn - 244 Old Town 909 3rd St Sacramento CA 95814 VDAHL Enterprises 2324 Granite Way Sacramento CA 95821
Vieira's Resort 15476 State Highway 160 Isleton CA 95641 Vince's Motel 9515 Folsom Blvd Sacramento CA 95827
Vizcaya - Elite Event Centre 2019 21st St Sacramento CA 95818 Westin 4800 Riverside Blvd Sacramento CA 95822
Winnies World 2924 Leta Lane Sacramento CA 95821
Wyndham Garden Sacramento 2298 Terracina Dr Sacramento CA 95834 Zephyr Winds Rentals LLC -
Harmanjeet
3215 Dierssen Road Elk Grove CA 95757
1101 Yale St
1143 W El Camino
1149 4th Ave
1200 38th St
1212 22nd St
1215 22nd St
130 Caravaggio
1331 56th St
1359 7th Av
1365 56th St
1412 V St
1414 C St
1417 25th St
1420 26th St
1518 Q St
1609 26th St
1609 U St
1611 26th St
1630 F St
1631 26th St
1815 Q St
1831 G St
1890 Bandon Way
1906 3rd Ave
1924 N St
1933 Vallejo Way
2011 17th St
205 Dragonfly
2082 57th St
STMD Management District Plan 35
March 22, 2024
2125 Government Alley
2130 22nd St
2165 Coroval Dr
2207 4th St
2216 24th St
2405 P St
2428 K ST
2510 P St
2512 John Glenn Way
2524 8th Ave
2566 16th St
2620 U St
2782 Trigo Way
2814 G St
2925 Mahaska Way
300 Picasso Cir
3008 61st St
3132 43rd St
3174 Chinatown Aly
3301 Huntsman
3348 40th St
3370 Zenobia Way
3509 1st Ave
3848 65th St
390 Caravaggio Cir
3904 E Commerce Way
4002 Porcupine Aly
4033 55th St
408 26th St
4309 53rd St
4322 4th Ave
4415 4th Ave
4624 13th Ave
4919 Winamac Dr
4922 Kokomo Dr
501 Bowman Ave
5121 Kenmar Rd
5125 U St
5135 Rio Linda Blvd
519 Blackwood St
5266 Kokomo Dr
554 Garden St
5607 State Ave
STMD Management District Plan 36
March 22, 2024
58 De Fer
5983 Mack Rd
617 23rd St
621 40th St
630 19th St
650 Dittmar Way
670 Wendell Echols Way
717 17th St
7663 Pocket Rd
8294 Sunny Creek
8397 Jackson Rd
848 38th St
8616 Midfield
967 38th St
Aaron & Erika Nunley
Aya Simplehome
Bill Johnston
Capital Journey
Casa Del Sol
Chalet Hospitality
Diana Weghorst
Dorsey Griffith
East Sac Hive
Jacqueline Brown
Jill's Airbnb
Land Park Poolside Paradise
Leave it Lynis
Leslie Willson
Luis Navarro
Marsha Roberts
Matthew Ayson
Matthew Lechowick
Mia Casa
Mica Gate LLC
Pamela Cameron
Peter Palko
Private Charming Guesthouse
Rashel Adragna
Riley Casita
Serge Morgan
Son Dinh
Tatiana Dolgina
Trouvaille Investments
STMD Management District Plan 37
March 22, 2024
Yabut

STMD Management District Plan 38
March 22, 2024
APPENDIX 3 – ZONE BENEFITS (ZB)

Visit Sacramento engaged Smith Travel Research (STR) to conduct a study that uses daily hotel- provided data from STR’s proprietary databases to explore how VS’s sales programs (listed below) and room night leads impact hotels across the four STMD zones. Although the hotel-provided data from STR is used in this analysis, the findings from the study present data which is aggregated to protect the confidentiality of the individual hotels.

ZB.1 Convention Center Sales
Conventions targeted by the execution of sales programs designed to produce District lodging meeting leads and room night sales demand for convention center users include, but are not limited to, professional and/or affinity group conferences, organizations or associations of meeting planners, business group clients, third party planners and individuals.

Additional activities include, but are not limited to, the deployment of a direct sales force tasked to attend sales conferences, prospect for new clients, and make sales calls on meeting planners, association and business group clients, third party planners and individuals. • Typical expenses include District-related trade show exhibit space rental, equipment rentals, outside contractors, bid and sponsorship fees, travel and entertainment, collateral, promotional items, information technology, market intelligence, research, and performance audits. Additional direct expenses may include District-related sales personnel salary, commissions, benefits, training, travel and entertainment, remote sales offices, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical indirect expenses include related contractor executive management, information technology support, and general and administrative overhead.

ZB.2 Group Sales and Direct Marketing Programs
Groups targeted by the execution of sales programs designed to produce District lodging meeting leads and room night sales demand for group business include, but are not limited to, professional and/or affinity group conferences, organizations or associations of meeting planners, business group clients, third party planners and individuals. Direct Marketing activities include, but are not limited to, the placement of advertisements to targeted affinity group organizations through various mediums such as business leisure, association and trade publications to directly influence the production of District lodging meeting leads and room night sales through conferences, meeting planners, individuals, associations, and group clients. • Typical group sales program expenses include District-related trade show exhibit space rental, equipment rentals, outside contractors, bid and sponsorship fees, travel and entertainment, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical group sales program indirect expenses include related contractor executive management, information technology support, and general and administrative overhead. • Typical group sales direct marketing expenses include advertising costs, agency fees, production, printing, distribution costs, District-related personnel salary, commissions, benefits, training, travel, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical group sales direct marketing indirect expenses include related information technology support, and general and administrative overhead.

STMD Management District Plan 39
March 22, 2024

ZB.3 Tourism/Travel and Trade Sales
Activities related to the execution of sales programs designed to produce District group meeting leads and room night sales demand include, but are not limited to, the deployment of a direct sales force to make calls on tour operators, travel agents, group tour leaders, inbound receptive operators, and attend domestic and international travel and trade shows. • Typical expenses include District-related sales personnel salary, commissions, benefits, training, remote international sales office representation, trade show exhibit space rental, set up and break down, collateral material, promotional items, travel and entertainment, information technology, market intelligence, research, and performance audits. • Typical indirect expenses include related information technology support, and general and administrative overhead.

ZB.4 Sports Commission Sales
Activities related to the development and execution of sporting events dedicated to the production of District lodging meeting leads and individual room night demand include, but are not limited to, branding Sacramento as an ideal destination for a variety of sports, raising the profile of Sacramento as a world-class sports destination, owning and operating sports properties that align with our business objectives, continuing to build and grow our services package, providing sports-specific content to be published in local, regional, national and international media, and creating a successful experience for event promoters that will generate interest and eventual bookings by events rights holders, community sports groups and local venue owners.
• Typical expenses include District-related personnel salary, commissions, benefits, outside contractors, rights fees, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical indirect expenses include related contractor event management, information sales and marketing support, and general and administrative overhead.

ZB.5 Film Commission Sales
Activities related to the execution of sales programs designed to produce District group meeting leads and room night sales demand include, but are not limited to, the deployment of direct sales calls on location scouts, commercial production houses, production companies and studios, attend Southern California film industry trade shows, and host familiarization visits for location professionals and producers. • Typical expenses include District-related sales personnel salary, benefits, local and state film incentives, trade show exhibit space rental, set up and break down, collateral material, promotional items, travel and entertainment, inbound site visits, market intelligence, research, and performance audits.
• Typical indirect expenses include related information technology support, and general and administrative overhead.

STMD Management District Plan 40
March 22, 2024
ZB.6 Event Management
Activities related to the development and execution of special events dedicated to the production of District lodging meeting leads and individual room night demand include, but are not limited to, branding Sacramento as an ideal event destination, raising the profile of Sacramento both internally and externally, continuing to build and support America’s Farm- to-Fork Capital brand, providing content to be published in local, regional and national media, and creating a successful attendee experience that will generate interest and buy-in from event planners, business group clients, and local residents and out-of-town visitors. • Typical expenses include District-related personnel salary, commissions, benefits, outside contractors, rights fees, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical indirect expenses include related contractor event management, information sales and marketing support, and general and administrative overhead.

ZB.7 Consumer Direct Marketing Programs
Activities related to the placement of web-based consumer direct advertising campaigns include, but are not limited to, advertising and dedicated Online Travel Agency (OTA) campaigns that have call-to-actions giving special privileges and benefits only to District assessed lodging businesses.
• Typical expenses include production and advertising costs, District-related personnel salary, commissions, benefits, training, travel, collateral material, promotional items, information technology, market intelligence, research, and performance audits. • Typical indirect expenses include information technology support, and general and administrative overhead.

ZB.8 Long-Term Convention, Sports, Tourism and Film
Activities related to the strategic development of long-term sales and marketing planning to ensure production of District lodging meeting leads and room night sales demand include, but are not limited to, strategies that ensure repeat business, return visits and positive word of mouth.
• Typical expenses could include, but are not limited to, District destination master plans, board retreats, contractor executive management, industry white papers, consultant fees, promotional items, market intelligence, research, and performance audits. • Typical indirect expenses could include related information technology support, and general and administrative overhead.

ZB.9 Zone Marketing Dollars
The District includes zone marketing dollars for specific marketing programs in each zone.

Hotel managers from each zone have a voice in how their collective zone marketing dollars are spent. Five percent of the District budget is dedicated to individual zones proportionate to the collections in each zone for activities that promote, support and enhance marketing efforts specific to each zone. Each zone receives 5 percent of the amount collected within the zone to fund eligible programs and activities.
• Typical expenses include event support, transportation, trade show and travel expenses, collateral, promotional items, and performance audits.
• Typical indirect expenses include related information technology support, and general and administrative overhead.

STMD Management District Plan 41
March 22, 2024

Benefit Category Zone 1 Zone 2 Zone 3 Zone 4 Total
ZB.1: Convention Center Sales 70% 20% 7% 3% 100%
ZB.2: Group Sales and Direct Marketing Programs 40% 35% 25% 100% ZB.3: Tourism/Travel and Trade Sales 60% 8% 25% 7% 100% ZB.4: Sports Commission Sales 29% 23% 13% 35% 100%
ZB.5: Film Commission Sales 13% 29% 35% 23% 100%
ZB.6: Event Management 40% 35% 25% 100%
ZB.7: Consumer Direct Marketing Programs 40% 35% 25% 100% ZB.8: Long-Term Convention, Sports, Tourism and Film 35% 29% 23% 13% 100% ZB.9: Zone Marketing Dollars 53% 27% 13% 7% 100%

ORDINANCE NO.

Adopted by the Sacramento City Council
An Ordinance to Renew the Sacramento Tourism Marketing District No. 2024-01

BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:

SECTION 1. The Sacramento Tourism Marketing District 2024-01 (STMD) was initially established in 2012 under the Property and Business Improvement District Law of 1994 (California Streets and Highways Code section 36600 et seq.) (referred to as the “PBID Law”) by City Council for a five-year term. It was then renewed in 2017 for a ten-year term that is set to expire in 2027.

SECTION 2. Lodging business owners within the boundaries of the STMD have submitted petitions to the City of Sacramento to renew the STMD for a ten-year term running from July 1, 2024 through June 30, 2034. The renewed STMD includes all lodging businesses, existing and in the future, available for public occupancy, located within the boundaries of the City of Sacramento and a portion of the unincorporated area of the County of Sacramento. The STMD boundary does not include the cities of Citrus Heights, Elk Grove, Folsom, Galt, Isleton, or Rancho Cordova. The STMD has been divided up into four (4) benefit zones, as shown on the boundary map in Exhibit A. Accordingly, renewal of the District by the City Council is sought in accordance with Streets and Highways Code section 36660.

SECTION 3. Included with the petitions was a summary of the Management District Plan (MDP) that describes the proposed assessment to be levied on businesses within the STMD to pay for services including the following: 1) producing print ads, brochures, and flyers; 2) posting on social media; and 3) marketing campaigns and industry partnerships. All of these services are intended to promote the area within the STMD as a destination for tourism, conventions, meetings, and events, and increase room night sales for the assessed lodging businesses. The MDP proposes to fund these services through the levy of an assessment on lodging businesses within the STMD. The STMD MDP is on file with the Infrastructure Finance division of the Department of Finance, designated by the City Clerk to be repository of documents associated with special districts.

SECTION 4. Section 36620.5 of the PBID Law authorizes cities to renew business improvement districts that include territory within a County upon said County’s consent. The City has requested and received consent from the County of Sacramento to include territory within its jurisdiction in the proposed STMD.

SECTION 5. The annual assessment rate for the proposed renewal term of the STMD is a percentage of gross short-term sleeping room rental revenue on lodging businesses within the STMD, varied by benefit zone. Based on the benefit received, assessments will not be collected on stays of more than 30 consecutive days. Annually, the STMD Committee (Committee) may increase the assessment rate incrementally, up to the maximum allowable rates for each zone as follows: the assessment rate in Zone 1 shall not exceed 4%; the assessment rate in Zone 2 shall not exceed

3.33%; the assessment rate in Zone 3 shall not exceed 2.66%; and the assessment rate in Zone 4 shall not exceed 1.33%, as detailed in the MDP. The members of the Committee are defined in the MDP. The assessment rate may also be decreased by the Committee, but shall not drop below the initial assessment rates for each zone listed above. The amount of the proposed assessment for the entire STMD will total approximately $9,540,000 in the first renewal year.

SECTION 6. The business owners who signed the petitions will collectively pay more than 50% of the proposed assessment. On February 6, 2024, Council adopted Resolution No. 2024-0027 entitled “Resolution of Intention to Renew the Sacramento Tourism Marketing District No. 2024-01.” As part of Council’s action, the dates and times of the public meeting and public hearing, respectively, were identified as follows: March 12, 2024, at 5:00 p.m. and March 26, 2024, at 5:00 p.m., with both events taking place in the City Council chambers, New City Hall, 915 “I” Street (first floor), Sacramento, California.

The City Clerk was directed to provide notice to affected business owners in accordance with Streets and Highways Code Section 36623(b) and Government Code Section 54954.6.

SECTION 7. Staff in the Infrastructure Finance Division of the Finance Department mailed Joint Public Meeting and Public Hearing notices, on the City Clerk’s behalf, to affected business owners in the proposed STMD on February 8, 2024 and signed an affidavit confirming compliance with the legal requirement for mailing the joint notices. Relying on this affidavit, Council finds that a joint public meeting and public hearing notice was mailed to each business owner of identified parcels within the territory of the STMD, as ordered by Resolution No. 2024-0027 and as required by the PBID Law.

SECTION 8. On March 26, 2024, at the place set forth in the joint notice of public meeting and public hearing mailed to all business owners within the STMD to be renewed, Council held a public hearing on the proposed assessment. During the public hearing, Council: (1) heard all protests against the proposed assessment from business owners within the STMD; and (2) accepted testimony from all interested persons, whether or not they own businesses within the STMD. The City Clerk has received, been given custody of, and tabulated the protests submitted and not withdrawn by the owners of businesses located within the STMD. The City Clerk has reported the results of the tabulation by her written Certificate to the City Council. The Clerk’s Certificate of Results for the Business Owner Majority Protest Proceeding specifies the protests that were submitted to the City Clerk, and not withdrawn, prior to the close of the public hearing on March 26, 2024. The protest for each business is weighted according to the proportional financial obligation of each business. The weight of the total compliant protests received and not withdrawn represents less than 50% of the total assessment proposed to be levied in the STMD. Therefore, a majority protest against the proposed assessment does not exist.

SECTION 9. Businesses in the STMD will be subject to amendments to the PBID Law.

SECTION 10. Bonds will not be issued for the STMD.

SECTION 11. A description of the exterior boundaries of the proposed STMD is contained in Exhibit A attached hereto and incorporated herein.

SECTION 12. The activities to be provided to benefit businesses in the STMD will be funded by the levy of the assessment. The revenue from the assessment levy shall not be used: to provide activities that directly benefit businesses outside the STMD; to provide activities or improvements outside the STMD; or for any purpose other than the purposes specified in this ordinance, the Resolution of Intention, the Resolution of Formation, the Resolution of Renewal, and the MDP. Notwithstanding the foregoing, improvements and activities that must be provided outside the STMD boundaries to create a specific benefit to the assessed businesses may be provided, but shall be limited to marketing or signage pointing to the area within the STMD.

SECTION 13. The assessments for the renewed STMD will be levied on lodging businesses within the STMD. The activities funded by the assessment will provide a specific benefit to assessed businesses within the STMD that is not provided to those not paying the assessment.

SECTION 14. The Resolution of Intention stated the City Council’s finding that the MDP satisfied all requirements of Streets and Highways Code Section 36622. The City Council hereby approves the MDP on the proposal to levy an annual assessment on lodging businesses within the STMD. The MDP is on file with the Infrastructure Finance Division of the Finance Department.

SECTION 15. The City Council hereby renews the STMD for a ten-year term beginning July 1, 2024, with an expiration date of June 30, 2034, for the territory generally described in Exhibit A, attached hereto and by this reference made a part of this ordinance.

SECTION 16. The City Council hereby confirms the assessment methodology specified in the MDP and the City Council levies the assessments detailed in the MDP on lodging businesses within the STMD to fund the activities and improvements described in the MDP. In accordance with Streets and Highways Code Section 36631 and the MDP, the assessment to fund the activities and improvements for the STMD will be collected on a monthly basis (including any delinquencies, interest, and overdue charges) from each assessed lodging business located in the boundaries of the STMD.

SECTION 17. The City Council hereby approves the annual budget and lodging business assessments for the STMD as set forth in the MDP.

SECTION 18. The City Manager or City Manager’s designee is hereby directed to take all necessary actions to complete the renewal of the STMD and levy the assessments.

SECTION 19. Upon any inconsistency between this Ordinance and the Resolution of Renewal, the Resolution of Renewal shall govern.

RESOLUTION NO.

Adopted by the Sacramento City Council

INTENTION TO MODIFY THE CURRENT SACRAMENTO TOURISM MAKETING

DISTRICT

BACKGROUND

A. On November 10, 2016, Council adopted Resolution No. 2016-0374, adopting the Management District Plan (MDP) and renewing the Sacramento Tourism Marketing District (STMD) for a ten-year term.

B. Although the current term of the STMD runs through June 30, 2027, the Owners’ Association for the STMD (Visit Sacramento) and lodging businesses within the district’s boundaries expressed a desire to renew the STMD now for a new ten-year term that would run from July 1, 2024 through June 30, 2034. Section 36635 of the Property and Business Improvement District Law of 1994 (Streets and Highways Code 36600 et. seq.) allows cities to modify a district’s MDP at the request of the Owners’ Association.

C. Accordingly, Visit Sacramento has requested modification of the MDP to replace the current MDP with a new one for the new ten-year renewal term. It is proposed by Visit Sacramento that the current MDP therefore be terminated as of June 30, 2024, and the new MDP be effective from July 1, 2024 through June 30, 2034.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1 The background statements in paragraphs A through C above are true.

Section 2 The City Council declares its intention to modify the Sacramento Tourism Marketing District’s existing MDP so that it terminates on June 30, 2024.

Section 3 The time and place for a public hearing on the modification of the MDP is set for May 7, 2024 at 5:00 p.m. in the City Council Chambers, New City Hall, 915 “I” Street (first floor), Sacramento, California.

Table of Contents:

Exhibit A – Modified Management District Plan

2017-2024

SACRAMENTO TOURISM

MARKETING DISTRICT

MANAGEMENT DISTRICT PLAN
March 7, 2024 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

CONTENTS
I. OVERVIEW ........................................................................................................................1 II. ACCOMPLISHMENTS ......................................................................................................2 III. BACKGROUND .................................................................................................................8 IV. BOUNDARY .......................................................................................................................9 V. BUDGET AND SERVICES ..............................................................................................11 A. Annual Service Plan ..................................................................................................... 11 B. Annual Budget .............................................................................................................. 13 C. California Constitutional Compliance .......................................................................... 14 D. Assessment ................................................................................................................... 16 E. Penalties and Interest .................................................................................................... 17 F. Time and Manner for Collecting Assessments ............................................................. 17 VI. GOVERNANCE ................................................................................................................18 A. Owners’ Association .................................................................................................... 18 B. Committee Structure .................................................................................................... 18 C. Brown Act and California Public Records Act Compliance ........................................ 18 D. Annual Report .............................................................................................................. 19 APPENDIX 1 – LAW ....................................................................................................................20 APPENDIX 2 – ASSESSED BUSINESSES .................................................................................34 APPENDIX 3 – ZONE BENEFITS ...............................................................................................38

Prepared by
Civitas

(800) 999-7781
www.civitasadvisors.com

STMD Management District Plan 1
March 7, 2024
I. OVERVIEW

Developed by Visit Sacramento (VS), the Sacramento Tourism Marketing District (STMD) is a n assessment district proposed to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. The STMD was formed in 2012 for a five (5) year term .

The STMD was subsequently renewed in 2017 for a ten (10) year term. In 2024, the STMD and this Management District Plan was modified to reduce the current term from ten (10) to seven (7) years, ending on June 30, 2024.

Location: The renewed STMD includes all lodging businesses located within the boundaries of the City of Sacramento and the unincorporated areas of the County of Sacramento.

The STMD has been divided into four (4) benefit zones, as shown on the map in Section IV.

Services: The STMD is designed to provide specific benefits directly to payors by increasing room night sales. Marketing and sales promotions will increase overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing room night sales.

Budget: The total STMD annual budget for the initial year of its seven (7) year operation is anticipated to be approximately $6,000,000. This budget is expected to fluctuate due to fluctuations in room sales and adjustments to the assessment rate s, as detailed in Section V.

Cost: The annual assessment rate is a percentage of gross short-term room rental revenue on lodging businesses, varied by benefit zone. In Zone 1 the annual assessment rate is three percent (3%); in Zone 2 the annual assessment rate is two and one-half percent (2.5%); in Zone 3 the annual assessment rate is two percent (2%); and in Zone 4 the annual assessment rate is one percent (1%). Assessments will not be collected on stays of more than thirty (30) consecutive days because STMD programs are only intended to increase short -term stays . Annually, the STMD Committee may increase the assessment rate in each zone by one-half of one percent (0.5%). However, no z one assessment rate shall exceed four percent (4%) of gross short -term room rental revenue. The assessment rate may also be decreased by the STMD Committee, but shall not drop below the initial assessment rates for each zone listed above.

Collection: The City and County will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the STMD. The City and County shall take all reasonable efforts to collect the assessments from each lodging business.

Duration: As a result of the 2024 modification, t he renewed STMD will have a seven (7) year life, beginning July 1, 2017 through June 30, 2024. Once per year, beginning on the anniversary of district renewal, there is a thirty (30) day period in which owners paying more than fifty percent (50%) of the assessment may protest and initiate a City Council hearing on district termination.

Management: The Visit Sacramento will continue to serve as the STMD’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council.

STMD Management District Plan 2
March 7, 2024

II. ACCOMPLISHMENTS

Visit Sacramento is charged with driving demand for Sacramento’s travel marketplace sufficient to create new revenues for its hotel partners and area businesses. VS’s Board of Directors and its employees see a very direct correlation between their work and their ability to favorably impact room night sales.

As VS entered the twenty -first century, Sacramento was struggling with destination marketing. VS worked hard to increase awareness of Sacramento as a tourism destination, but was stymied by a lack of funding. In 2001, a tourism business improvement district was created to fill the funding gap that allowed for a more effective marketing of Sacramento’s lodging businesses. VS budget was $2.7 million in 2001 and has grown to $11.2 million in 2016 with the STMD contributing $6.25 million of that growth. The e nhancements generated by the new funding are outlined in the following three objectives.

Objective One: Generate Visitor-Related Economic Impact The STMD funds generated by VS hotel partners fund about half of VS’s budget with the expectation that each year VS will achieve increased measurable economic results. With this plan in place, VS now renews its commitment to achieving and exceeding the results expected by its partners, and those positive results depend on a strategic business plan focused on continued and enhanced generation of overnight visitors. The business plan’s strategies and programs generated by the new funding include, but are not limited to, the following:

Primary Target Audiences

Convention Meeting Planners, Sports Rights Holders, Tour Operators, Leisure Visitors, Film & Video Professionals, Event Organizers

Strategies

Face-to-Face
• Attend industry tradeshows
• Attend and/or host sales missions and sales calls
• Organize and host client familiarization trips to Sacramento • Expand and strengthen network with location professionals throughout the state • Contract with third-party and DMO partnerships to identify additional national associations

Lead Prospecting & Generation
• Prospect for potential meetings and conventions utilizing industry tools and best practices • Engage with sports organizations and venue partners to identify and secure high profile events • Identify resources for national track & field events
• Target and aggressively pursue food and agriculture conferences • Participate in tour operator co-operative marketing opportunities • Develop integrated media campaigns
• Mine existing and new data in customer management system to target and re-target customers

Incentives
• Offer bid support to convention and sports groups that meet citywide criteria when appropriate

STMD Management District Plan 3
March 7, 2024
• Offer value-added product or service to tour groups
• Incentivize location professionals to scout and book Sacramento for film production

Packaging
• Leverage existing events for promotion
• Develop features on the website Sacramento365.com to drive (and track) hotel bookings • Develop sellable tourism itineraries

Programs

Tradeshows/Client Events/Sales Missions/FamTrips
• Meeting planner and association trade show attendance: PCMA, RCMA, MIC of Colorado, DMAI Destination Showcase, SGMP national and local, MPI local, golf tournament and WEC, ASAE Springtime and Annual Meeting, CalSAE Annual Conference and Seasonal Spectacular, Helms Briscoe Annual Conference, Collaborate Marketplace, Connect Marketplace, SHA golf tournament, IMEX, Rejuvenate Marketplace, UC Davis Vendor Showcase, NCBMP, Holiday Showcase • Tour operator trade show attendance: ABA, NTA, Go West Summit, RTO Summit, IPW, SYTA • Meeting planner client events: Kings vs Wizards (Washington, D.C.) • Tour operator sales missions-domestic and international: i.e., Visit California events; California Cup • Tour operator familiarization trips: i.e., United Airlines, Funway, German, United Kingdom

Research & Reports
• Ongoing subscription and utilization of industry reports for group prospecting: i.e., STR, TAP, MINT

Advertising – Media Buys
• Convention-print and digital: Meetings Focus, Smart Meetings, Aspire, Meetings & Conventions • Travel professionals-print: Group Tour, Teach & Travel • Leisure travel-print: Sunset, Via
• Leisure travel-digital: Expedia
• Market to interest-specific groups: i.e., family, mature, LGBT, food & wine, outdoor

Product Development & Enhancements – Packaging
• Cross-promotion of Sacramento365.com monthly “Make it a Night” promotion with links to hotels
• Develop event hotel packages: Grape Escape, PRIDE, Music Festival, Sky Spectacular • Develop seasonal hotel packages that target need periods

STMD Management District Plan 4
March 7, 2024
Objective Two: Satisfy the Customer
To ensure long -term success in the form of repeat business, return visits and positive word of mouth, VS and its stakeholders must provide excellent customer service before, during and after a customer or visitor stay, whether a convention, group tour or weekend visit. To accomplish this, the strategies and programs generated by the new funding include, but are not limited to, the following:

Primary Target Audiences

Meeting Planners, Convention Delegates, Tour Operators, Tour Group Passengers, Leisure Visitors, Film & Video Professionals, Event Organizers

Strategies

Customer Service
• Provide programs that serve the convention planning team prior to convention arrival • Provide programs that benefit delegates while in Sacramento attending a convention • Provide extra value, flexibility and ease for tour operators • Assist production companies with navigating Sacramento film/video process • Provide in-destination visitor services

Inbound Marketing
• Produce relevant content across multiple platforms
• Modernize customer-focused digital and cloud-based platforms

Product Development & Enhancements
• Create successful fan/attendee experiences as part of event • Incorporate new features into each event where possible • Produce brand-focused materials for customers and visitors

Stakeholder Relations
• Maximize partner usage of customer relationship database system • Provide education and information to partners on incoming groups • Enhance face-to-face customer events

Programs

Customer Service – Support
• Convention & meeting pre-promotional support for customers • Provide comprehensive directory of sports venues
• Microsite tool
• Service referrals
• Coordinate convention housing
• Offer “Show Your Badge” program on mobile application • Welcome signage program
• Information booth specialist
• Expand film location library and directory

STMD Management District Plan 5
March 7, 2024
Inbound Marketing
• Targeted microsites & landing pages on website
• Country-specific/international language microsite launch • Quarterly educational tourism topics
• Integrate brand standards into pre-promotional customer events

Collateral – Digital & Print
• Three Official Visitors’ Guides
• Meeting Planning Guide
• Profile (itinerary) sheets
• Digital asset management system
• Virtual convention center tour
• Google mapping of convention center

Stakeholder Relations – Support & Education
• Service requests
• Convention profile
• Convention calendar
• Compression calendar
• Regularly scheduled SPIN training (in-person, webinars, online guides) for partners

Objective Three: Position Sacramento for Long-Term Visitor Business VS is committed to continually improving the Sacramento region’s image and visitor experience to position Sacramento for long-term success. VS delivers on this commitment through brand strategy, product development and enhancements as well as tourism infrastructure advocacy efforts. The strategies and programs generated by the new funding to ensure future success include, but are not limited to, the following:

Primary Target Audiences

Meeting Planners, Tour Operators, Leisure Visitors, Civic Officials, Stakeholders

Strategies

Face-to-Face
• Increase face-to-face interaction with residents/community and stakeholders that have the ability to influence tourism policy and product development

Lead Prospecting & Generation
• Aggressively pursue meeting planners and tour operators • Work closely with sports organizational and venue partners, as well as community leaders, to identify and secure high-profile events
• Aggressively pursue food and agriculture conferences

Marketing and Brand Management
• Integrate Sacramento and America’s Farm-to-Fork Capital brand standards into marketing • Align events with America’s Farm-to-Fork Capital brand standards • Communicate Sacramento as an ideal event destination
• Promote America’s Farm-to-Fork Capital brand experience • Produce relevant content across multiple platforms

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March 7, 2024
Publicity
• Create consistent engaging editorial content related to convention, sports and tourism offerings • Create farm-to-fork-specific editorial content
• Leverage and enhance existing social media platforms
• Utilize and enhance existing communications vehicles
• Leverage Brand USA and Visit California Programs

Product Development & Enhancements
• Champion and aggressively pursue the expansion of the Convention Center • Support the transformation of the Community Center Theater • Support the launch of Golden 1 Center and Downtown Commons • Launch and own specific regional sporting events
• Set foundation to launch national track & field event • Initiate plan to improve and/or build new product: i.e., venues and facilities • Develop brand-specific visitor, convention product
• Include recognizable brand elements that align with the Sacramento brand • Provide content to be published in local, regional and national media • Align America’s Farm-to-Fork Capital brand with key food leadership activities • Partner with key leaders hosting regional speaker engagements • Serve on community boards and committees
• Engage community and stakeholders in brand product development • Advocate for additional product development and improvements • Implement sports facility development initiative
• Provide support for external groups to produce overnight visitor-generating events

Programs

Lead Prospecting & Generation
• Attendance and evaluation of competitive food conferences – marry feedback from stakeholders and conference evaluations to help shape 2016 conference • Identify resources to support an annual national track & field event

Advertising – Media Buys
• Convention/Meeting-print & digital: Meetings Focus, Smart Meetings, Aspire, Meetings & Conventions
• Travel Professionals-print: Group Tour, Teach & Travel • Leisure travel-print: Sunset, Via
• Leisure travel-digital: Expedia
• Social media promoted posts

Inbound Marketing
• Social media
• Email
• “Meeting Planner News” – monthly
• “Travel Talk” – monthly
• Visit Sacramento – monthly
• “Dig In” – monthly
• “3-6-5” – weekly outreach to subscribers with curated content • Blog posts

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Media Relations
• Editorial calendar targeted to local, feeder, trade and national media • Farm to Fork-specific editorial calendar
• Monthly media segments
• Media tours
• High-profile media events attendance
• Media visits

Events/VS-Produced
• Corporate Run 3.1 (May)
• Farm-to-Fork Taste of Summer (June)
• Gold Rush Days (Labor Day Weekend)
• Farm-to-Fork Celebration (September)
• New Year’s Eve Sky Spectacular
• Quarterly Farm-to-Fork speakers’ series

Events/VS-Supported
• Amgen Tour of California
• Sacramento Music Festival
• Aftershock
• TBD
• Juneteenth

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III. BACKGROUND

TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, nearly one hundred California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas, and Newark, New Jersey, used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon, and Memphis, Tennessee, have utilized their home rule powers to create TMDs without a state law.

California’s TMDs collectively raise
over $ 200 million fo r local
destination marketing. With
competitors raising their budgets
and increasing rivalry for visitor
dollars, it is important that
Sacramento lodging businesses
continue to invest in stable, lodging-
specific marketing programs.

Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase room night sales.

In California, TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMD s and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.

There are many benefits to TMDs:

• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion.

1 2 4 6 9 12
19 24 28 31
37 45
60 63
72 80
88 95
0 10
20 30
40 50
60 70
80 90
100
1989
1995
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Number of Districts Operating in CA Per Year

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IV. BOUNDARY

The STMD will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Sacramento and the unincorporated areas of the County of Sacramento. The STMD boundary does not include the cities of Citrus Heights, Folsom, Rancho Cordova, Elk Grove, Galt and Isleton.

Lodging business means: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location or other similar structure or portion thereof.

The boundary, as shown in the map below, currently includes 108 lodging businesses. A complete listing of lodging businesses within the STMD at the time of the renewal can be found in Appendix

2. The STMD is divided into four (4) benefit zones, based on the special benefits and privileges granted to lodging businesses in each zone. The boundaries of each zone are shown in the map on the following page. A description of the boundaries of each zone is provided below:

Zone 3: Includes Gardenland, South Natomas, North Sacramento, North Natomas, and the Sacramento International Airport. The western boundary is the Sacramento River; the northern boundary is W Elverta Road between Garden Highway and Highway 99, Highway 99 between W Elverta Road and W Elkhorn Boulevard, and W Elkhorn Boulevard between Highway 99 and the Union Pacific Railroad; the eastern boundary is the Union Pacific Railroad; and the southern boundary is the American River.

Zone 4: Includes all remaining areas of the City and County of Sacramento. Zone 4 does not include the cities of Isleton, Galt, Elk Grove, Rancho Cordova, Citrus Heights, and Folsom.

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STMD Boundary Map

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V. BUDGET AND SERVICES

A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the STMD funds are sales and marketing programs available only to assessed businesses. The assessment rate in each zone will be commensurate with privileges and services provided to assessed businesses in each zone as detailed in Appendix 3 . If the assessment rate in any two (2) z ones are equal, the privileges and services provided to assessed businesses in those zones will be the same.

A service plan budget has been developed to deliver services that benefit the assessed businesses. A detailed annual budget will be developed and approved by the STMD Committee and the VS Board of Directors. The total initial budget is $ 6,000,000, and the table below illustrates the initial annual budget allocations.

Although actual revenues will fluctuate due to market conditions and assessment rate changes, the proportional allocations of the budget shall remain the same. However, the City and the VS board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the STMD , any and all assessment funds may be used for the costs of defending the STMD.

Each budget category includes all costs related to providing that service, in accordance with Generally Accepted Accounting Principles (GAAP). For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget.

Sales & Marketing,
$5,220,000 , 87%
Zone Micro-
Marketing,
$600,000 , 10%
City & County
Collection Fee,
$120,000 , 2%
Administration,
Contingency &
Renewal, $60,000 ,
1%
Initial Annual Budget - $6,000,000

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The costs of an individual staff member may be allocated to multiple budget categories, as appropriate and in accordance with GAAP. The staffing levels necessary to provide the services below will be determined by VS on an as-needed basis.

Sales and Marketing
A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Sacramento as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed businesses; • Print ads in magazines and newspapers , television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Attendance at trade shows to promote assessed businesses; • Sales blitzes for assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Attendance at professional industry conferences and affiliation events to promote assessed businesses;
• Lead generation activities designed to attract tourists and group events to assessed businesses; • Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed businesses; and
• Development and maintenance of a website designed to promote assessed businesses.

Zone Micro-Marketing
Ten percent (10%) of the budget, or approximately $600,000, shall be dedicated to individual zones for zone-specific tourism improvement activities, as described below.

The zone micro-marketing funds will be utilized for local zone activities that promote, support and enhance zone-based tourism marketing efforts. Each zone shall receive ten percent (10%) of the amount collected within the zone to fund eligible programs a nd activities. These programs are an exclusive privilege and shall provide a direct specific benefit to assessed businesses in the Zone, incremental room night sales.

Individual zone micro-marketing funding is designed to support z one-based activities that promote, support and enhance room night sales, including but not limited to:
• Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed businesses; • Print ads in magazines and newspapers , television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; • Attendance at trade shows to promote assessed businesses; • Sales blitzes for assessed businesses;
• Familiarization tours of assessed businesses;
• Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
• Attendance at professional industry conferences and affiliation events to promote assessed businesses;

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• Lead generation activities designed to attract tourists and group events to assessed businesses; • Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed businesses; and
• Development and maintenance of a website designed to promote assessed businesses.

Administration, Contingency and Reserve
The administration, contingency and reserve budget shall be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal, and accounting fees. The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the Owners’ Association. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the Board of Directors of the Owners’ Association. The reserve fund may be used for the costs of renewing the District.

B. Annual Budget
The total ten (10) year improvement and service plan budget was projected at approximately $6,000,000 annually, or approximately $68,800,000 through 2027 if assessment rates are not increased.

The $68,800,000 estimate included a three percent (3%) increase to the budget per year due to effectiveness of STMD programs. If maximum assessment rate increases are adopted, the estimated total assessment through 2027 was projected to be $105,900,000 through 2027. In 2024, the term has been modified to seven (7) years. Due to the reduction of the STMD’s term, the annual assessment budget is projected at $6,000,000 annually, or approximately $45,974,773.09 through June 30, 2024 if assessment rates are not increased. If maximum assessment rate increases are adopted, the estimated total assessment through June 30, 2024 is $67,267,744.92. This is a required disclosure and not the anticipated course of action. This budget is expected to fluctuate as room sales change and if the assessment rate is increased. The initial assessment rate is:

Initial Zone Assessment Rates
Zone Assessment Rate
Zone 1 3.0%
Zone 2 2.5%
Zone 3 2.0%
Zone 4 1.0%

The STMD Committee may increase the assessment rate annually in each zone independently by a maximum of one -half of one percent (0.5%) at the direction of the lodging properties within each zone. However, no zone assessment rate shall exceed four percent (4%) of gross short -term room rental revenue. A n ew assessment rate cannot be increased until FY2018-19, but increases may be implemented in later years at the discretion of the STMD Committee based on the cost of specific benefits to assessed lodging businesses . The assessment rate may also be decreased by the STMD Committee, but shall not drop below the initial zone assessment rates listed in the table above . The table below demonstrates the maximum total assessment with the assumption that assessment rates will be increased by one-half of one percent (0.5%) in each z one until the maximum assessment rate of four percent (4%) has been reached, as it is a required disclosure. However, it is not the anticipated

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course of action. Additionally, a three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of STMD efforts. This three percent (3%) annual increase is a conservative estimate based on the effects of similarly sized TMD budgets. If the maximum annual assessment increases are adopted by the STMD Committee, the estimated annual budget will increase as shown in the table below. The table below reflects budget projections pursuant to the term modification implemented in 2024 to end the STMD early on June 30, 2024.

Estimated Annual Budget if Maximum Assessment Rates Are Adopted 2017-2024
Fiscal
Year
Sales &
Marketing
Zone Micro-
Marketing Collection Fee
Administration,
Contingency
& Reserve
Total
2017-18 $5,220,000.00 $600,000.00 $120,000.00 $60,000.00 $6,000,000.00 2018-19 $6,524,999.89 $749,999.99 $150,000.00 $75,000.00 $7,499,999.87 2019-20 $7,886,743.90 $906,522.29 $181,304.46 $90,652.23 $9,065,222.88 2020-21 $8,796,970.24 $1,011,146.00 $202,229.20 $101,114.60 $10,111,460.05 2021-22 $9,511,254.16 $1,093,247.60 $218,649.52 $109,324.76 $10,932,476.05 2022-23 $10,026,832.80 $1,152,509.52 $230,501.90 $115,250.95 $11,525,095.17 2023-24 $10,556,137.08 $1,213,349.09 $242,669.82 $121,334.91 $12,133,490.90 TOTAL $58,522,938.07 $6,726,774.49 $1,345,354.90 $672,677.45 $67,267,744.92

Estimated Annual Budget if Maximum Assessment Rates Are Not Adopted 2017-2024
Fiscal
Year
Sales &
Marketing
Zone Micro-
Marketing Collection Fee
Administration,
Contingency
& Reserve
Total
2017-18 $5,220,000.00 $600,000.00 $120,000.00 $60,000.00 $6,000,000.00 2018-19 $5,376,600.00 $618,000.00 $123,600.00 $61,800.00 $6,180,000.00 2019-20 $5,537,898.00 $636,540.00 $127,308.00 $63,654.00 $6,365,400.00 2020-21 $5,704,034.94 $655,636.20 $131,127.24 $65,563.62 $6,556,362.00 2021-22 $5,875,155.99 $675,305.29 $135,061.06 $67,530.53 $6,753,052.86 2022-23 $6,051,410.67 $695,564.44 $139,112.89 $69,556.44 $6,955,644.45 2023-24 $6,232,952.99 $716,431.38 $143,286.28 $71,643.14 $7,164,313.78 TOTAL $39,998,052.59 $4,597,477.31 $919,495.47 $459,747.73 $45,974,773.09

C. California Constitutional Compliance
The STMD assessment is not a property-based assessment subject to the requirements of Proposition 218. The Court has found, “Proposition 218 limited the term ‘assessments’ to levies on real property.”1 Rather, the STMD assessment is a business -based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions.

Two of these exceptions apply to the STMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services.

1 Jarvis v. the City of San Diego 72 Cal App. 4th 230

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privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed lodging businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment . These services are tailored not to serve the general public , businesses in general, or parcels of land, but rather to serve the specific lodging businesses within the District. The activities described in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within the boundaries of the District, and are narrowly tailored. STMD funds will be us ed exclusively to provide the specific benefit of increased room night sales directly to the assessees. Assessment funds shall not be used to feature non- assessed lodging businesses in STMD programs, or to directly generate sales for non- assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses.

The assessment imposed by this District is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in room night sales. The specific benefit of an increase in room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment within the District boundary , with marketing and sales programs promoting lodging businesses paying the district assessment within the District boundary. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased room night sales to the assessed lodging businesses.

Although the District, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.” 3 2. Specific Government Service
The assessment may also be utilized to provide “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product .”4 The legislature has recognized that marketing and promotions services like those to be provided by the STMD are government services within the meaning of Proposition 26 5. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.” 6 3. Reasonable Cost
District services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by VS, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from district -funded activities, be featured in advertising campaigns, and benefit from other district-funded services. Non-

2 Cal. Const. art XIII C § 1(e)(1)
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)

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assessed lodging businesses outside the STMD boundary will not receive these, nor any other, district- funded services and benefits.

The District-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non- assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non-District funds. STMD funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.

D. Assessment
The a nnual assessment rate is a percentage of gross short -term room rental revenue on lodging businesses, varied by benefit zone . In Zone 1 the annual assessment rate is three percent (3%); in Zone 2 the annual assessment rate is two and one-half percent (2.5%); in Zone 3 the annual assessment rate is two percent (2%); and in Zone 4 the annual assessment rate is one percent (1%) as shown on the table below. Assessments will not be collected on stays of more than thirty (30) consecutive days because STMD programs are only intended to increase short -term stays . Annually, the STMD Committee may increase the assessment rate in each z one by one -half of one percent (0.5%).

However, no z one assessment rate shall exceed four percent (4%) of gross short -term room rental revenue. The assessment may also be decreased by the STMD Committee, but shall not drop below the initial zone assessment rates listed in the table below.

Initial Zone Assessment Rates
Zone Assessment Rate
Zone 1 3.0%
Zone 2 2.5%
Zone 3 2.0%
Zone 4 1.0%

Assessment rates may be subject to an annual increase of one -half of one percent (0.5%) per year.

The maximum assessment rate for each Zone is:

Fiscal Year Zone 1 Zone 2 Zone 3 Zone 4
2017-18 3.0% 2.5% 2.0% 1.0%
2018-19 3.5% 3.0% 2.5% 1.5%
2019-20 4.0% 3.5% 3.0% 2.0%
2020-21 4.0% 4.0% 3.5% 2.5%
2021-22 4.0% 4.0% 4.0% 3.0%
2022-23 4.0% 4.0% 4.0% 3.5%
2023-24 4.0% 4.0% 4.0% 4.0%

The term “gross room rental revenue” as used herein means: the consideration charged whether or not received, for the occupancy of space in a lodging business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without any deduction therefrom whatsoever . Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes.

The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of

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assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. The assessment shall be disclosed as the “ Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of , the assessed lodging business, even if it is passed on to transients. The assessment shall not be considered revenue for any purposes, including calculation of transient occupancy taxes.

Bonds shall not be issued.

E. Penalties and Interest
The STMD shall reimburse the City and County of Sacramento for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent STMD assessment are sought to be recovered in the same collection action by the City or County, the STMD shall bear its pro -rata share of such collection costs. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:

1. Original Delinquency: Any lodging business that fails to remit any assessment imposed within the time required shall pay a penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment.

2. C ontinued Delinquency : Any lodging business that fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed.

3. Fra ud : If the City or County determines that the nonpayment of any remittance due is due to fraud, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsections 1 and 2 of this s ection E.

4. I nterest : In addition to the penalties imposed, any lodging business that fails to remit any assessment imposed shall pay interest at the rate of one -half of one percent (0.5%) per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

5. P
enalties Merged with Assessment: Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment herein required to be paid.

F. Time and Manner for Collecting Assessments
The STMD assessment will be implemented beginning July 1, 2017 and will continue for seven (7) years through June 30, 2024. The City and County of Sacramento will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in their respective jurisdictions. The City and County shall take all reasonable efforts to collect the assessments from each lodging business. The City and County shall forward the assessments collected to the Owners’ Association.

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VI. GOVERNANCE

A. Owners’ Association
The City Council , through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the O wners’ Association of the STMD as defined in Streets and Highways Code §36612. The City Council has determined that Visit Sacramento will continue to serve as the Owners’ Association for the STMD. The STMD Tourism District Committee (Committee) shall continue to manage district funds and activities.

1. The Committee shall have seven (7) members. All committee members shall be representatives of assessed lodging businesses. Three (3) members shall be representatives of Zone 1 lodging businesses, two (2) shall be representatives of Zone 2 lodging businesses, one (1) shall be a representative of a Zone 3 lodging business, and one (1) shall be a representative of a Zone 4 lodging business.

2. All Committee members shall serve three-year terms.

5. No fewer than fifty percent (50%) of the VS ’s Executive Committee shall be representatives of lodging businesses paying the STMD assessment.

6. All members of the Committee shall be members of the VS Board of Directors.

C. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the VS board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action.

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D. Annual Report
VS shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

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APPENDIX 1 – LAW

*** This document is current through the 2016 Supplement *** (All 2015 legislation)

STREETS AND HIGHWAYS CODE
Division 18. Parking
Part 7. Property and Business Improvement District Law of 1994

Cal Sts & Hy Code Div. 18, Pt. 7 (2016)

CHAPTER 1. General Provisions [36600 - 36617]

ARTICLE 1. Declarations [36600 - 36604]

36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.”

36601. Legislative findings and declarations; Legislative guidance The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or businesses in a business district are not taxes for the general benefit of a city, even if property or persons not assessed receive incidental or collateral effects that benefit them.
(e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment.

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(g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property- based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits. The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.

36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act.

This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.

36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).

36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.

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36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.

ARTICLE 2. Definitions [36606 - 36616]

36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed businesses and real property located in the district.

36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.

36607. “Business”
“Business” means all types of businesses and includes financial institutions and professions.

36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California.

36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part.

36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.

36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.

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36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the area. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.

36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622.

36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, disc ussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all records relating to activities of the district.

36614. “Property”
“Property” means real property situated within a district.

36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.

36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property.

36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment.

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36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.

36615.5. “Special benefit”
“Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property -based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.

36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.

ARTICLE 3. Prior Law [36617- 36617.]

36617. Alternate method of financing certain improvements and activities; Effect on other provision This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.

CHAPTER 2. Establishment [36620 - 36630]

36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter.

36620.5. Requirement of consent of city council
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.

36621. Initiation of proceeding; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. T he amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is

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signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district.
(2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.

36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a busine ss assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part.

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(d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. (f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof.
(2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property- based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property -based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property - based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (l) In a property-based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district.
(m) In a property-based district, the total amount of general benefits, if any.

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(n) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council.

36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council. (c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.

36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.

36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:

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(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district.
(2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district. (4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit.
(8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.

36626. Resolution establishing district
If the city council, following the public hearing, desires to establish the proposed property and business improvement district, and the city council has not made changes pursuant to Section 36624, or has made changes that do not substantially change the proposed assessment, the city council shall adopt a resolution establishing the district. The resolution shall contain all of the information specified in Section 36625.

36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or Section 36626, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.

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36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone.

36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property- based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.

36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district.

36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.

CHAPTER 3. Assessments [36631 - 36637]

36631. Time and manner of collection of assessment; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.

36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.

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36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.

36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed.

36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter.

36636. Modification of plan by resolution after public hearing; Adopting of resolution of intention (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623.

Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.

36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.

CHAPTER 3.5. Financing [36640- 36640.]

36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments (a)The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city counci l as necessary to accommodate assessments levied upon business pursuant to this part.

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(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.

CHAPTER 4. Governance [36650 - 36651]

36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year. (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.

36651. Designation of owners’ association to provide improvements, maintenance, and activities The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.

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CHAPTER 5. Renewal [36660- 36660.]

36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.

CHAPTER 6. Disestablishment [36670 - 36671]

36670. Circumstances permitting disestablishment of district; Procedure (a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the area who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention.

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36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan.
(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

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APPENDIX 2 – ASSESSED BUSINESSES
STMD
Zone Property Address Sacramento State Zip City/
County
1 Amber House B & B 1315 22nd Street Sacramento CA 95816 City 1 American Inn 626 16th Street Sacramento CA 95814 City 1 America's Best Value Inn-
Downtown 430 16th Street Sacramento CA 95814 City
1 America's Best Value Inn-Old
Town 221 Jibboom Street Sacramento CA 95814 City
1 Best Western Plus Sutter House 1100 H Street Sacramento CA 95814 City 1 Best Western Sandman 236 Jibboom Street Sacramento CA 95814 City 1 Capitol Park Hotel 1125 9th Street Sacramento CA 95814 City 1 Comfort Suites-Downtown 226 Jibboom Street Sacramento CA 95814 City 1 Congress Hotel 906 12th Street Sacramento CA 95814 City 1 Days Inn Sacramento 228 Jibboom Street Sacramento CA 95814 City 1 Delta King Hotel 1000 Front Street Sacramento CA 95814 City 1 Econo Lodge-Downtown 711 16th Street Sacramento CA 95814 City 1 Embassy Suites Hotel 100 Capitol Mall Sacramento CA 95814 City 1 Governor’s Inn 210 Richards Blvd. Sacramento CA 95814 City 1 Hawthorn Suites by Wyndham
Sacramento 321 Bercut Drive Sacramento CA 95814 City
1 Holiday Inn Capitol Plaza 300 J Street Sacramento CA 95814 City 1 Holiday Inn Express-
Sacramento 726 16th Street Sacramento CA 95814 City
1 Hyatt Regency Sacramento 1209 L Street Sacramento CA 95814 City 1 Inn and Spa at Parkside 2116 6th Street Sacramento CA 95818 City 1 Inn Off Capitol Park 1530 N Street Sacramento CA 95814 City 1 La Quinta Inn Sacramento 200 Jibboom Street Sacramento CA 95814 City 1 Liestal Alley Vacation Rental 1718 Liestal Alley #100 Sacramento CA 95811 City 1 Motel 6 623 16th Street Sacramento CA 95814 City
1 Motel 6 #0013 Downtown 1415 30th Street Sacramento CA 95816 City 1 Motel 6 #1305 Old Sacramento 227 Jibboom Street Sacramento CA 95814 City 1 Quality Inn Sacramento 818 15th Street Sacramento CA 95814 City 1 Red Lion Inn & Suites 1319 30th Street Sacramento CA 95816 City 1 Residence Inn By Marriott-
Capitol Park 1500 L Street Sacramento CA 95814 City
1 Sheraton Grand Sacramento 1230 J Street Sacramento CA 95814 City 1 Super 8-State Capitol 216 Bannon Street Sacramento CA 95814 City 1 The Citizen Hotel 926 J Street Sacramento CA 95814 City 1 The Sterling Hotel 1300 H Street Sacramento CA 95814 City

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STMD
Zone Property Address Sacramento State Zip City/
County
1 Vagabond Inn-Old Town 909 3rd Street Sacramento CA 95814 City 1 Vizcaya Pavilion & Mansion 2019 21st St. Sacramento CA 95814 City 2 Best Budget Inn 986 E. El Camino Ave. Sacramento CA 95815 City 2 Budget Inn & Suites 3721 Watt Ave. Sacramento CA 95821 County 2 Canterbury Village Hotel &
Suites 1900 Canterbury Rd Sacramento CA 95815 City
2 Courtyard by Marriott-Cal Expo 1782 Tribute Rd. Sacramento CA 95815 City 2 DoubleTree by Hilton
Sacramento 2001 Point West Way Sacramento CA 95815 City 2 Economy Inn 939 E. El Camino Ave. Sacramento CA 95815 City 2 Extended Stay America #939 2100 Harvard Street Sacramento CA 95815 City 2 Fairfield Inn by Marriott-Cal
Expo 1780 Tribute Rd. Sacramento CA 95815 City
2 Hampton Inn & Suites 2230 Auburn Blvd. Sacramento CA 95821 County 2 Hilton Sacramento Arden West 2200 Harvard Street Sacramento CA 95815 City 2 Holiday Inn Express & Suites-
Cal Expo 2224 Auburn Blvd. Sacramento CA 95821 County
2 Larkspur Landing 555 Howe Ave. Sacramento CA 95825 County 2 Lexington Inn & Suites-Cal
Expo 1413 Howe Ave. Sacramento CA 95825 County
2 Motel 6 #4430 Cal Expo 2224 Auburn Blvd. Sacramento CA 95821 County 2 Red Lion Woodlake & Conf.

Center 500 Leisure Lane Sacramento CA 95815 City
2 Residence Inn by Marriott-Cal
Expo 1530 Howe Ave. Sacramento CA 95825 County
2 Sands Motel 2160 Auburn Blvd. Sacramento CA 95821 City 2 Surf Motel 3204 Auburn Blvd. Sacramento CA 95821 County 2 Towneplace Suites Cal Expo 1784 Tribute Road Sacramento CA 95815 City 2 Tradewinds Motel 2844 Auburn Blvd. Sacramento CA 95821 County 3 Courtyard By Marriott-So.

Natomas 2101 River Plaza Drive Sacramento CA 95833 City 3 Extended Stay America #936 3825 Rosin Court Sacramento CA 95834 City 3 Extended Stay America #9608 2810-2830 Gateway
Oaks Dr. Sacramento CA 95833 City
3 Fairfield Inn & Suites Natomas 2730 El Centro Rd. Sacramento CA 95833 County 3 Four Points by Sheraton 4900 Duckhorn Dr. Sacramento CA 95834 City 3 Hampton Inn & Suites-
Natomas 3021 Advantage Way Sacramento CA 95835 City
3 Hilton Garden Inn-So.

Natomas 2540 Venture Oaks Way Sacramento CA 95833 City
3 Holiday Inn Express- Natomas 2981 Advantage Way Sacramento CA 95835 City 3 Homewood Suites-Natomas 3001 Advantage Way Sacramento CA 95834 City 3 Quality Inn Natomas 3796 Northgate Blvd. Sacramento CA 95834 City 3 Residence Inn By Marriott-
Natomas
2410 West El Camino
Ave. Sacramento CA 95833 City
3 Sacramento 49er Travel Plaza 2828 El Centro Rd. Sacramento CA 95833 County

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STMD
Zone Property Address Sacramento State Zip City/
County
3 Springhill Suites by Marriott-
Natomas 2555 Venture Oaks Way Sacramento CA 95833 City
3 Staybridge Sacramento 140 Promenade Circle Sacramento CA 95834 City 3 Super 8-El Centro 2654 El Centro Rd. Sacramento CA 95834 County 4 America's Best Value Inn-
Sacramento South 18 Massie Court Sacramento CA 95823 City 4 B & W Resort Marina 964 Brannan Island Rd. Isleton CA 95641 County 4 Best Six Motel 5969 Stockton Blvd. Sacramento CA 95824 City 4 Best Western John Jay Inn 15 Massie Court Sacramento CA 95823 City 4 Casa Linda Motel 9509 Folsom Blvd. Sacramento CA 95827 County 4 Comfort Inn & Suites 21 Howe Ave. Sacramento CA 95826 City 4 Courtyard by Marriott-Midtown 4422 Y Street Sacramento CA 95817 City 4 Courtyard Inn 3425 Orange Grove North
Highlands CA 95660 County
4 Crowne Plaza 5231 Date Ave. Sacramento CA 95841 County 4 Deville Motel 2756 Stockton Blvd. Sacramento CA 95817 City 4 Fairfield Inn & Suites-Elk
Grove 8058 Orchard Loop Elk Grove CA 95624 County
4 Good Nite Inn 25 Howe Ave. Sacramento CA 95826 City
4 Grand Island Mansion 13415 Grand Island Rd. Walnut
Grove CA 95690 County
4 Hawthorn Suites by Wyndham 12180 Tributary Point
Dr. Gold River CA 95670 County
4 Hotel Med Park 2356 Stockton Blvd. Sacramento CA 95817 City 4 IHG Army Hotels
Bldg 650 on BT Collins Army
Reserve Center
8300 Santa Cruz Street Sacramento CA 95828 City
4 Johnson’s Greenbrier Motel 4331 Stockton Blvd. Sacramento CA 95820 City 4 La Quinta Inn #631 4604 Madison Avenue Sacramento CA 95841 County 4 Laguna Del Sol 8683 Rawhide Ln. Wilton CA 95693 County 4 Lion’s Gate Hotel 3410 Westover St., Bldg.
150 McClellan CA 95652 County
4 Mega Inn 4600 Watt Ave. North
Highlands CA 95660 County
4 Motel 6 #1005 Central 7850 College Town
Drive Sacramento CA 95826 City
4 Motel 6 #1043 7407 Elsie Ave. Sacramento CA 95828 County 4 Motel 6 #1306 5110 Interstate Ave. Sacramento CA 95842 County 4 Red Roof Inn 7780 Stockton Blvd. Sacramento CA 95823 City 4 Rodeway Inn 6610 Stockton Blvd. Sacramento CA 95823 City 4 Royal 8 Inn 6448 Stockton Blvd. Sacramento CA 95823 City 4 Ryde Hotel 14340 Hwy 160
P. O. Box 43 Ryde CA 95680 County
4 Sky Riders Motel 6100 Freeport Blvd. Sacramento CA 95822 City

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STMD
Zone Property Address Sacramento State Zip City/
County
4 Stardust Motel 8637 Folsom Blvd. Sacramento CA 95826 City 4 Super 8-55th 7216 55th St. Sacramento CA 95823 County 4 Super 8-Madison 4317 Madison Ave. Sacramento CA 95842 County 4 The Villas at Arden Hills 1220 Arden Hills Lane Sacramento CA 95864 County 4 The Westin Sacramento 4800 Riverside Blvd. Sacramento CA 95822 City 4 Travelodge 9646 Micron Ave. Sacramento CA 95827 County 4 Value Place 7789 La Mancha Way Sacramento CA 95823 City 4 Vieira’s Resort 15476 State Highway
160 Isleton CA 95641 County
4 Vince’s Motel 9515 Folsom Blvd. Sacramento CA 95827 County

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APPENDIX 3 – ZONE BENEFITS (ZB)

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ZB.3 Tourism/Travel and Trade Sales
Activities related to the execution of sales programs designed to produce District group meeting leads and room night sales demand include, but are not limited to, the deployment of a direct sales force to make calls on tour operators, travel agents, group tour leaders, inbound receptive operators, and attend domestic and international travel and trade shows. • Typical expenses include District-related sales personnel salary, commissions, benefits, training, remote international sales office representation, trade show exhibit space rental, set up and break down, collateral material, promotional items, travel and entertainment, information technology, market intelligence, research, and performance audits. • Typical indirect expenses include related information technology support, and general and administrative overhead.

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ZB.6 Event Management
Activities related to the development and execution of special events dedicated to the production of District lodging meeting leads and individual room night demand include, but are not limited to, branding Sacramento as an ideal event destination, raising the profile of Sacramento both internally and externally, continuing to build and support America’s Farm- to-Fork Capital brand, providing content to be published in local, regional and national media, and creating a successful attendee experience that will generate interest and buy-in from event planners, business group clients, and local residents and out-of-town visitors. • Typical expenses include District-related personnel salary, commissions, benefits, outside contractors, rights fees, collateral, promotional items, information technology, market intelligence, research, and performance audits.
• Typical indirect expenses include related contractor event management, information sales and marketing support, and general and administrative overhead.

ZB.9 Zone Marketing Dollars
The District includes zone marketing dollars for specific marketing programs in each zone.

Hotel managers from each zone have a voice in how their collective zone marketing dollars are spent. Ten percent of the District budget is dedicated to individual zones proportionate to the collections in each zone for activities that promote, support and enhance marketing efforts specific to each zone. Each zone receives 10 percent of the amount collected within the zone to fund eligible programs and activities.
• Typical expenses include event support, transportation, trade show and travel expenses, collateral, promotional items, and performance audits.
• Typical indirect expenses include related information technology support, and general and administrative overhead.

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Sacramento City CouncilApril 2, 2024

Sacramento City Council
April 2, 2024